29.10.2015 12:15
Press Releases

Fingrid’s grid service fees to rise – targeting a stable and predictable tariff

Fingrid Oyj will raise grid service fees at the start of 2016 by an average of 14 per cent. The fee increases are based on the higher return level made possible by the new regulatory model and the financing of the company’s investments. Despite the increases, grid service fees in Finland are still reasonable in comparison with other European countries.
The operations and pricing of Finland’s transmission system operator are monitored by the Energy Authority. January marks the start of a new regulatory period, one which will allow the TSO a higher return level than the previous few years. The Energy Authority’s new regulatory model will raise the reasonable rate of return on electricity network operations closer to the European level.
 
The return for the current financial year, excluding changes in the fair value of derivatives and taxes, is projected to improve considerably from the previous year, and thus the company is expected to end the regulatory period ending in 2015 with surplus revenue. As previously stated by the company, this surplus has been taken into account in the grid service fees for 2016 as a factor lowering the amount of the increase.
 
The company will raise the grid service fees at the start of 2016 for the new regulatory period by an average of 14 per cent, in line with the reasonable rate of return determined by the Energy Authority. Despite the increase, the price level is still reasonable compared to other European countries, and there will be no significant changes in electricity prices for regular consumers. The grid service fee currently accounts for only two per cent of a consumer’s electricity bill. For people who live in a block of flats, their electricity bill will increase by an estimated two euros per year as a result, and for owners of detached homes that are electrically heated, the increase will be roughly six euros per year.
 
“The new return level will enable Fingrid to maintain Finland’s electricity network as one of the most reliable in the world. The reliability of the electricity network is a fundamental pillar of a well-functioning society, which is why the company’s investment pace in reinforcing the grid remains brisk,” says CEO Jukka Ruusunen, commenting on the new grid service fees.
 
Fingrid’s total capital expenditure in 2015–2016 is estimated at EUR 150 million. The entire sector has major investments ahead, which can be attributed to customer needs, the modernisation of an aging grid, the developing electricity markets and the amended Electricity Market Act.
“The need for investments has been taken into consideration in the regulations. Somewhat higher earnings will be permitted for Fingrid, thus allowing the company to accomplish its core mission and make the required investments,” says Ruusunen.
 
For Fingrid’s customers, the new regulatory model will bring additional stability and predictability to the development of grid service fees. The model will be in effect for eight years instead of the previous four years.
 
The new regulatory model will also increase transparency in the use of congestion income. In future, it will be accounted for separately from other income, which means major variations will no longer affect grid service fees. 
 
Further information:
Jan Montell, Chief Financial Officer, tel. +358 30 395 5213 or +358 40 592 4419
(can be reached on Thursday, 29 October 2015) or
Jukka Ruusunen, President & CEO, tel. +358 30 395 5140 or +358 40 593 8428
(can be reached on Friday, 30 October 2015)