The majority state-owned energy company Fortum is to raise the retail prices to be paid by its electricity consumers across Finland as of January 2007 by ten per cent, at a time when the electricity prices on the Nordic wholesale market have been declining sharply.
The increase for the clients resident in Espoo is higher than Fortum's price hike in other parts of the country. Moreover, it will take place only six months after Fortum acquired a majority holding in the electric utility E.ON Finland - formerly the municipal electric company of the City of Espoo.
Fortum announced that the price of electricity is to be raised by approximately 15 per cent for those Espoo households who have a contract that is valid until further notice.
On an annual level, the increase amounts to some nine per cent. The tax and transmission prices will not be raised this time.
In comparison, the price hike in other parts of the country will be around ten per cent, which on an annual level amounts to around five per cent on the monthly electricity bill.
According to Fortum, the reason for the higher price hike in Espoo is that the prices in Espoo have been lower than those elsewhere in the country. After this adjustment the prices in Espoo are more or less equal to those in other parts of Finland.
However, the fact that the electricity prices on the Nordic wholesale market have recently been declining sharply puts Fortum's current announcement of price increases in a peculiar light.
