City of Espoo shocked at Fortum announcement of electricity price hikes
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The announcement by the electric utility Fortum that it is raising the price of electricity by approximately 15 per cent for Espoo households from the New Year came as a shock to Espoo residents and decision-makers alike.
Last year, when the City Council of Espoo decided to sell the City's shares in electricity supplier E.ON Finland - formerly the municipal electric utility of the City of Espoo - those who opposed the transaction feared that Fortum would rapidly recoup the price through higher energy bills to Espoo residents.
However, the majority of the city's decision-makers - headed by Mayor Marketta Kokkonen (National Coalition Party) - said then that competition on the electricity market would prevent this from happening.
Within the administration of the City of Espoo, the news of the electricity price hike was received with a mixture of shock and resignation. Some members of the City Council were dismayed, while some argued that it could be anticipated. Nevertheless, the price hike was regarded as surprisingly sharp.
"The City cannot do anything about the increase, as there is no written agreement to the contrary", noted Director Olavi Louko from the City's Section of Environmental and Technical Services, acting as deputy to Mayor Kokkonen, who was on vacation on Thursday.
Furthermore, Fortum's promise - made to the Espoo side at the time - not to raise transmission prices, was not included in the purchase contract, either. Consequently, there is only a gentlemen's agreement that no such hike would happen.
"Fortum's clients in Espoo could naturally ask for quotations from competing electric companies", advised Chairman of the City Board Jukka Mäkelä (National Coalition Party).
Actually, even the City of Espoo has an electricity contract with Fortum.
"Being cost-conscious, we will also have to assess what would be the best alternative for the City", Mäkelä concluded.
Last year, when the City Council of Espoo decided to sell the City's shares in electricity supplier E.ON Finland - formerly the municipal electric utility of the City of Espoo - those who opposed the transaction feared that Fortum would rapidly recoup the price through higher energy bills to Espoo residents.
However, the majority of the city's decision-makers - headed by Mayor Marketta Kokkonen (National Coalition Party) - said then that competition on the electricity market would prevent this from happening.
Within the administration of the City of Espoo, the news of the electricity price hike was received with a mixture of shock and resignation. Some members of the City Council were dismayed, while some argued that it could be anticipated. Nevertheless, the price hike was regarded as surprisingly sharp.
"The City cannot do anything about the increase, as there is no written agreement to the contrary", noted Director Olavi Louko from the City's Section of Environmental and Technical Services, acting as deputy to Mayor Kokkonen, who was on vacation on Thursday.
Furthermore, Fortum's promise - made to the Espoo side at the time - not to raise transmission prices, was not included in the purchase contract, either. Consequently, there is only a gentlemen's agreement that no such hike would happen.
"Fortum's clients in Espoo could naturally ask for quotations from competing electric companies", advised Chairman of the City Board Jukka Mäkelä (National Coalition Party).
Actually, even the City of Espoo has an electricity contract with Fortum.
"Being cost-conscious, we will also have to assess what would be the best alternative for the City", Mäkelä concluded.
Helsingin Sanomat