Antti Rinne (left), the chairperson of the Social Democrats, and Prime Minister Juha Sipilä (right) have both suggested that electricity distributors should be brought under state ownership to curb increases in transmission prices. (Antti Aimo-Koivisto – Lehtikuva)

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FINNISH ENERGY has fired back at claims that increases in electricity transmission prices are a consequence of electricity distributors not being in state ownership.

Prime Minister Juha Sipilä (Centre) and Antti Rinne, the chairperson of the Social Democratic Party, opened a Pandora’s Box by stating in Oulu on Monday that they believe electricity distributors should be brought under state ownership to keep the price increases in check.

“We introduced a cap on the increases, but transmission prices have increased outrageously all over Finland. Electricity here is affordable, but its transmission costs way too much. If the state has to own something, I think that something should be all electricity grids – not just the main grid owned by Fingrid,” commented Sipilä.

“The grids must be publicly owned,” echoed Rinne.

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But are the recent increases in transmission prices indeed a result of the divestment of the distribution businesses of Fortum and Vattenfall?

Although the divestments did lead the creation of two of the largest electricity distributors in Finland, Caruna and Elenia, most of the 80 distributors in the country remain fully or partially in municipal ownership. In addition, transmission prices have crept up for all distributors regardless of the extent of their investments in developing the distribution network.

Jukka Leskelä, the managing director of Finnish Energy, believes Rinne and Sipilä got carried away in the heat of the election race.

“They were talking very loosely about things and misleading people about electricity transmission prices in the debate,” he said. “We ended up in this situation because the same politicians decided that electricity is such an important commodity that its supply must be secured.”

The Finnish government, he reminded, effectively decided that electricity grids must be thoroughly overhauled to improve the security of electricity supply in the wake of a powerful storm that swept across the country on 26 December 2011.

“This obligation to invest billions of euros is an extra cost to electricity companies and someone – that is, the customer – has to pay for it. This has nothing to do with the ownership of electricity distributors,” stated Leskelä.

“If you really wanted to have an effect on electricity transmission prices, you’d have to talk about the requirements laid down in the relatively new law, meaning talk about whether you’re ready to make compromises about the security of electricity supply,” he added.

He also expressed his disapproval with the suggestion that electricity transmission is expensive in Finland.

“Sipilä also claimed completely erroneously that electricity transmission is expensive in Finland. We’re very competitive in international comparison and become even more competitive if geography is taken into consideration,” underlined Leskelä.

Aleksi Teivainen – HT
Source: Uusi Suomi