Enefit asks Narva to justify at what price heating becomes unaffordable for residents

Estonian energy company Enefit is asking the city government of Narva, in eastern Estonia on the Russian border, to explain more clearly at what price district heating becomes economically unaffordable for residents. The answer matters because it affects whether shale oil may be used to produce heat this winter to avoid a sharp rise in heating costs.

Narva's city government considers the optimal heat price to be 74–80 euros per megawatt-hour excluding value-added tax (VAT) and proposes allowing shale oil use in winter. The correspondence between the city and the company relates to a permit from Estonia's Environmental Board allowing shale oil for heat production while there is a threat of gas supply disruptions or a risk that district heating becomes unaffordable for consumers.

The city's arguments

In a letter dated 23 October, Narva mayor Jaan Toots pointed to residents' comparatively low incomes. According to tax returns, the average declared gross income of a Narva resident is 1,283 euros a month, versus 1,973 euros across Estonia. More than 41% of residents who filed returns reported annual income of 6,000–14,400 euros, equal to 500–1,200 euros a month before tax.

The city also calculated heating costs assuming a household uses 15 megawatt-hours a year. At 74 euros per megawatt-hour excluding VAT, heating would cost about 115 euros a month including tax; at 138 euros, about 214 euros a month. Annual costs would rise by roughly 1,190 euros, or 86.5%. By Toots's estimate, at 138 euros heating would take about 18% of monthly gross income for someone earning 1,200 euros and 43% for someone earning 500 euros.

The city says no single price can be set beyond which heating becomes unaffordable for everyone, since it depends on household composition, actual income, floor area and consumption. It names December 2026 to March 2027 as the most critical period.

Enefit's reply

In a reply on 26 October, Enefit head Raine Paju said that referring to a desirable or optimal price is not enough to justify shale oil use to the Environmental Board. As possible benchmarks, the company cites energy poverty criteria: household energy costs exceeding 10% of income, or 15–20% for low-income families. Paju acknowledged there is no single mandatory methodology, but said the city's assessment must be supported by data. Enefit also suggested Narva turn to Statistics Estonia if needed.