Fortum price hike prompts households to seek cheaper alternatives

The price increases implemented by the electric utility Fortum has sent consumers looking for cheaper alternatives. More consumers have noticed that comparing prices of service providers could save them money.
      The recent price hike by Fortum is having its greatest impact on residents of Espoo, who are facing a 15 per cent increase in their electricity rates. For most others, prices have gone up by 10 per cent.
      Customer service operators at Fortum have been busy, with many customers complaining about the unexpected price rise, while many others have been asking for advice, as well as information on their electricity bills.
     
The impact of the price rise can be felt as far away in Joensuu in North Karelia. The city sold its municipal power utility to Espoo Electricity, which sold out to E.ON, which was sold to Fortum and is currently known as Fortum Espoo.
      Fortum has between 25,000 and 30,000 customers in Joensuu, many of whom are looking at other options. The local electric company, Pohjois-Karjalan Sähkö, has been busy answering calls and taking on new customers. There have been so many enquiries, that the company has managed to respond to only 70 percent of calls.
      "We were expecting new customers, but the amount of interest nevertheless came as a surprise. The row over the company’s stock options was already bringing dozens of new customers a day. Now there are hundreds. Some want to switch companies without even asking about the price", says Heikki Rantamäki, head of business operations of Pohjois-Karjalan Sähkö.
     
The renewed interest in comparing prices can also be seen on the Internet. Tens of thousands of people have been visiting websites where prices of various electricity providers can be compared.
      One such website, maintained by the Energy Market Authority, had to shut down for half an hour on Monday morning because its server was overloaded.
      Tapio Silvennoinen of the Energy Market Authority noted that consumers follow price fluctuations of petrol very closely: variations of one cent, or even a tenth of a cent per litre are noticed immediately. "It is wise to do the same with electricity. You can reduce your bill by a larger number of euros", Silvennoinen says.
      Officials have not kept close watch over customer behaviour, but closer scrutiny is in store. Now there are only rough estimates of customers switching service providers. According to the estimates, between 10 and 15 per cent of customers have done so.
     
Helsinki Energy has been busier than usual. Jukka Niemi, head of retail sales at the utility will not reveal business secrets, but hints that the company has received more customers than it has lost.
      Niemi was surprised himself when he compared the upcoming prices of Helsinki Energy with those of Fortum.
      "Now the difference in the price of electricity for residents of apartments is 8.6 per cent in our favour, but next year it will be 27 per cent. It will certainly direct sales activities in the direction of Espoo" Niemi says.
     
Vantaa Energy said on Monday that it was raising its prices from the beginning of the year. The company said that next year the wholesale price of electricity will continue to be high. However, these have been brought down by the increased rain which has replenished reservoirs in recent weeks.
      The sales prices of electricity will increase by 8-11 per cent, and the overall price will go up by 5-7 per cent.
      "Even after the price hikes this autumn, electricity prices in Finland and the Nordic Countries are low, in comparison with the market price. For instance, the average price of a typical household in Vantaa with electric heating is still lower than the wholesale price for the coming year", the company notes.


Previously in HS International Edition:
  City of Espoo shocked at Fortum announcement of electricity price hikes (24.11.2006)
  Fortum announces sharp price hikes in 2007 (23.11.2006)
  Energy company Fortum to scale back lucrative perks to management (16.3.2006)
  Fortum options spark row between Centre Party and Social Democrats (28.9.2005)
  Fortum reports good result in areas where it holds monopoly (21.10.2005)

Links:
  Energy Market Authority