ERRA Regulatory Story No. 20: A Discount Built into the Tariff: How Lithuania Shields its Vulnerable Electricity Consumers

How do you protect vulnerable households from high electricity prices without distorting the market or straining public finances? Lithuania's answer is to build the support directly into the regulated tariff — no separate benefit to apply for. A structural layer allocates the cheapest procurement volumes to vulnerable consumers, and a fiscal layer adds a government-funded per-kWh reduction on top, together cutting the price around 18% below standard supply.

The mechanism is largely self-financing, drawn from EU inframarginal-cap surplus revenues rather than the general budget. It's also refreshingly honest about its limits: only about 121,000 of 420,000 eligible consumers currently benefit — a reminder that automatic delivery removes friction but doesn't guarantee full take-up.

Read more in the latest Regulatory Story by ERRA prepared along with the National Energy Regulatory Council (NERC) of Lithuania by downloading the document below.