Security costs could raise water, heat and electricity bills

Security spending by essential service providers could be reflected in water, heating and electricity prices, ERR reported. Water companies are investing in cybersecurity, while district heating companies are considering measures including drone defence and moving pipelines underground.

Estonia has nearly 300 companies whose ability to keep operating during a crisis or war is considered particularly important, including water, heating, electricity and gas providers. Russia’s actions across the border have brought new expectations for these companies.

Aare Palmsalu, head of Rakvere Vesi, told ERR that water companies are focusing mainly on cybersecurity. Some have also bought helmets and bulletproof vests. Companies have spent years preparing for power cuts by purchasing backup generators, developing contingency plans and storing fuel, he said, adding that these costs are already included in water prices. The company has not yet decided whether to build protective concrete structures around its pumping stations.

SW Energia, which manages nearly 60 district heating networks, has so far focused on preventing power, communications and water outages, development manager Vadim Nogtev said. The company may also need to consider drone defence and physical protection, but it is not yet clear what those measures would involve. District heating companies believe the military could help identify critical service facilities and respond to drones if needed, Nogtev said.

Providers largely have to determine for themselves what investments to make. The Government Office told ERR that municipalities should oversee water and heating companies. The Competition Authority also assesses proposed spending when a company seeks to include security investments in its water or heating tariff.

Competition Authority head Evelin Pärn-Lee said the agency allows security costs to be added to tariffs when companies can justify them adequately. But assessing the best option can be difficult: the authority may not be equipped to decide whether a substation should be encased in concrete or protected with concrete blocks, she said.

Pärn-Lee said she was particularly concerned that some water, gas and heating companies were not preparing for crises or war. In her view, many providers of essential services have yet to work out what investments are needed to ensure supply if the security situation worsens.