ERO with public clarification regarding the treatment of bad debt in the tariff process

The Energy Regulatory Office (ERO) has attempted to provide a public clarification regarding the treatment of bad debt in the tariff process, stating that based on the latest projections, data shows an improvement in collection after the pandemic and on this basis, and based on studies that preceded this, ERO has decided that the level of bad debt will be 1.8% for 2025, 1.6% for 2026 and 1.4% for 2027.

"ERO assures citizens that no tariff decision is made to protect non-payment, but to guarantee supply stability," the article states.

Full disclosure:

The Energy Regulatory Office (ERO), in order to accurately inform the public, clarifies the meaning and application of bad debt within the tariff system. Bad debt is an element clearly regulated in the Rule on the Establishment of Revenues of Universal Service Providers and has been applied for years in all tariff processes, to ensure that tariffs reflect real and verified costs, as well as to protect customers who pay regularly.

Bad debt is considered only that part of the financial obligation that, even after following all legal procedures and exhausting all legal collection mechanisms, remains realistically uncollectible.

ERO does not automatically accept the operator's requests because tariff regulation is not built on assumptions, but on verified facts and each request is subject to professional analysis and evaluation, therefore the request from KESKO to increase bad debt to around 5% is unacceptable to ERO.

Based on the latest projections, data shows an improvement in collection after the pandemic and on this basis, and based on studies that preceded this, ERO has decided that the level of bad debt will be 1.8% for 2025, 1.6% for 2026 and 1.4% for 2027. ERO assures citizens that no tariff decision is taken to protect non-payment, but to guarantee stability of supply.

All ERO regulatory processes are public and transparent. Each assessment is based on professional reports published for consultation and the final decision is taken by the ERO Board only after reviewing the comments of all stakeholders. This guarantees decisions that are well-founded, lawful and in the general public interest.