Changes in pricing of products Basic electricity and Wind power from 15 October

Did you get a letter from us in Finnish or Swedish regarding our products Basic electricity (Perussähkö/Basel) and Wind power (Tuulisähkö/Vindel)? Here’s the contents of the letter in a pink nutshell along with some FAQ’s.

Due to drastic changes in the energy market, we are changing the pricing of our products Basic electricity and Wind power. Starting from 15 October we will adjust the price four times a year. Check your letter or this page for the price according to your own product and measuring type.

The products’ price periods will be 1 January–31 March, 1 April–30 June, 1 July–30 September and 1 October–31 December. The first price period 15 October–31 December will be exceptionally short due to the change taking place in the middle of the month.

Frequently asked questions

Why is the pricing of the products Basic electricity and Wind power changed?

The reason is that the energy market has been through huge changes during a short period of time. The market right now is very unpredictable. Price variations on the wholesale market are more frequent and bigger than ever before. We have, during a short period of time, seen both historically low as well as historically high prices.

Since this seems to be a kind of a new normal, we also must change the way we are pricing our products and make them more flexible to better be able to follow the changes on the market. For us this is a way to adjust to a new normality.

When we determine the price four times per year, instead of setting a price until further notice, we are also minimizing the price risks the pricing entails. The price is following seasonal and other variations on the market, and a lower market price will also be showing faster on the customer’s bill.

Is it legal to increase the price this much?

To us it is very important to follow the instructions and guidelines within our field. From a legal point of view, right now there is no limit that would say how much it is allowed to increase the price in euros or percentage. The reason would be that the consumer can chose any electricity supplier he/she wishes.

Despite this we are also aware that this kind of increase is creating big challenges for many of our customers. Since we, as a company, cannot affect the market, we have aimed towards finding other ways to be able to meet you halfway in a situation like this. If it looks like you won’t be able to pay your electricity invoice, contact us before the due date and together we can try to find a solution that works.

How is the pricing of the products different from before?

From now on, the price will be adjusted four times per year. The price is following the electricity market prices, three months at a time. The price periods are 1.1–31.3, 1.4–30.6, 1.7–30.9 and 1.10–31.12. The first price period, 15.10-31.12, will be a bit shorter than normal since the change happens in the middle of October. We will send you a message regarding the forthcoming three-month period, latest one month before the new period begins. We will also publish the upcoming price on our website.

When will the electricity prices go down?

The electricity price development is for the moment very uncertain. Right now, within the field it is estimated that the price will go down in spring. If that turns out to be the case, it will also show in your electricity contract. The fact is that these price variations are here to stay, and we will therefore see both higher and lower prices in the future.

That said, we are constantly looking into possibilities to lower the price as soon as it in any way is possible for us and even in the middle of a price period.

Why isn’t the price lower for people in Vaasa/Vaasan Sähköverkko’s distribution area?

We are e nationwide actor, and almost half of our customers live outside of our distribution area. The direction as well as our main owner believes it is important that our entire customer base is treated on the same terms and fairly.

It is difficult for us to take a stand on how other actors in the same field are pricing their products, since we don’t have enough information about their acquisition processes.

In a nutshell, you can say, the bigger the clientele, the bigger the price risk.

I cannot afford the new electricity price and I cannot find a cheaper contract. What shall I do?

We are concerned over the fact that the new price will constitute an enormous worry among our customers. We have therefore looked through all our processes to find the ways we can make a difference and offer support in our customers everyday life.

  • Start using electronic invoicing and order the invoice once a month. When you split the invoice over several months, the monthly cost is also smaller.
  • Be in contact with us before the due date if you are unsure of being able to pay the invoice. Together we can find a solution that works for you. And do not worry, our customer service is here to help make your situation easier
  • Save electricity if possible.

Why isn’t Vaasan Sähkö selling its production at a self-cost price to its customers?

Electricity acquisition is a multifaceted process. We are not selling the production directly to the customers, we are selling it to the electricity market. From there we are also buying the electricity that our customers are using.

To be able to assure our customers electricity access, the electricity needs to be acquired beforehand. This means we will have to not only estimate how many customers we have but also how much electricity our customers will use. Wrong estimates due to, for example, a longer colder period than expected, leads to big costs for the electricity supplier. When the market price on electricity varies from low to extremely high prices within short periods of time, the risk for the corporation is large. The bigger the customer base the bigger the risk. Usually, the electricity consumption is the biggest when the price is the highest, which shows in the form of higher acquisition costs. This won’t show on the customers invoice since the price is set beforehand.

That we also have our own production is a big foundation stone when you look at the continuity of the business. Sadly, due to this market situation the production won’t create a complete counterweight. The income we get from selling our production is not enough for covering our losses that develop from selling electricity cheaper than the market price.

Both the corporation as well as our main owner’s goal is to reach a situation where we will not be at a loss. Therefore, we have not got a profit margin in the upcoming electricity price.

How will the sales tax (VAT) changes be shown on the electricity bill?

If the sales tax for electrical energy sales is lowered, this will be automatically put into use, and it will show on your invoice for the time that the lower sales tax is valid. The sales tax is always displayed on the invoice, which makes it easy for you to check what percentage is used. We will also inform this change on the places we inform about out consumer prices.

The sales tax is a part of the bill that in it’s whole will go to the tax department, no matter what percentage is used. The change does not affect the electricity corporations profit margin and in this way, it will also be shown on your invoice.

If the sales tax is lowered from 24% to 10% for the energy sales as it has been said, the change could look like this on your invoice:

Example:

Electrical energy + basic fee (incl. VAT 24%), earlier 100,00 EUR
Electrical energy + basic fee (incl. VAT 10%), during the period of lowered sales tax 88,71 EUR

Bear in mind that the sales tax reduction is only planned for the electricity supply part of the bill, therefore this won’t affect the electricity distribution costs (verkkopalvelu/nättjänst).