Fortum price hike inspires electricity consumers to shop around

Retail sales of electricity a minor consideration in Fortum's bottom line

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The recent announcement of an impending price hike for household customers of the partially state-owned electric utility Fortum that it would raise retail prices of electric power has inspired thousands of consumers to compare prices of different service providers. The company cancelled the move earlier this week.
      On Tuesday there was a record number of 51,795 hits on the website of the Energy Market Authority, which provides customer comparisons.
      The average number of hits since last weekend has been more than 30,000 a day, whereas before the uproar began the average number of daily hits was between 1,000 and 3,000.
      The Energy Market Authority opened its price comparison service in February. On Wednesday the pages had their millionth hit.
     
Fortum is not disclosing how many customers it has lost over the furore.
     "Naturally some have left, but quite a few have gone back on their decisions", says Jarmo Kurikka of Fortum Market, which deals with retail sales of electricity.
      Kurikka said that the number of lost customers is not in the thousands. Fortum cancelled the price hike on Tuesday, after which he says the number of customer contacts and their tone of their communications has gone back to normal.
     
Of Fortum's competitors, Vantaa Energy calculates that it has answered over 1,000 requests for offers for electricity contracts in the past week and a half.
      The company says that requests are still coming in, even though Vantaa followed the footsteps of Fortum and said that it was also raising its prices. Vantaa Energy is holding on to its decision to raise prices, even though Fortum cancelled its price hike.
     
Helsinki Energy has received enquiries from hundreds of potential customers every day. About 400 enquiries came during the weekend.
      Customers have had the option to choose among electricity service providers since 1998. According to an estimate by VaasaEmg, a research group on energy and utilities marketing linked with the University of Vaasa, about 16-17 per cent of households have switched electricity suppliers.
     
Market experts point out that retail sales of electricity to individual household consumers constitutes a very small part of Fortum's turnover.
      Most of the company's EUR 1.377 billion in profits last year came from the generation of electricity and its sale on the wholesale market via the Nordic Nord Pool system. Retail sales of electric power comprised just two per cent of the profit.


Previously in HS International Edition:
  Fortum cancels rate hike owing to "sudden decline in wholesale price" (29.11.2006)
  Fortum price hike prompts households to seek cheaper alternatives (28.11.2006)
  City of Espoo shocked at Fortum announcement of electricity price hikes (24.11.2006)

Helsingin Sanomat