In the Oulu region, the local Sähköosuuskunta returns the profits of its production to consumers at lower prices.
Power prices have fallen wildly from the peak readings of the previous winter. Many could still rub their eyes when a Facebook group focusing on electricity contracts boasted about a two-year fixed-price electricity contract paying six cents per kilowatt hour.
The next cheapest two-year contracts pay in Finland now from eight to nine cents per kilowatt hour and more with all expenses.
HS found out what is the secret of this apparently the cheapest electricity in Finland.
The bad news first: electricity cannot be sold to the whole of Finland at this price. This is the membership price of the Oulu regional electricity cooperative.
To get it, you have to live in the area of the Oulu region’s electricity network in Kempelee, the area of the former Oulunsalo municipality, Liminga, Lumijoki, Tyrnävä, Muhos, Utajärvi or Vaala. There are approximately 25,000 households in the area.
The good news for the consumer is that it seems to be a rare example of an alternative way of organizing the production and sale of electricity. In it, production profits are directed directly to support a cheaper price.
General Secretary of the Consumers’ Association Juha Beurling-Pomoell considers the case interesting precisely for this reason.
“Those who have enough of their own electricity production can benefit from this,” he says.
The consumer union is supported by also regional electricity company price ceilings. Beurling-Pomoell considers such cuts to be good for the consumer, even if it means that the price of electricity in Finland varies depending on the location of the home.
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The cheap price is based on the membership benefit.
Oulu the cheap price of the region’s electricity is based on the membership benefit. Electricity is sold by Oomi, but members of the cooperative receive a 30 percent discount on Oomi’s electricity contracts.
You can become a member of the cooperative with a one-time fee of 20 euros. You can get that back if you ever move out of the area. Membership does not obligate you to anything.
HS called on Friday to sell electricity in the Oulu region. A two-year contract would have been received from Oomi at a two-year fixed price of 9.25 cents per kilowatt hour. Price 30 percent at a discount is 6.47 cents.
The customer service said that for those living in the area, taking out another electricity contract is “absolute madness”.
Of the 25,000 households in the area, about 20,000 are members of the cooperative.
In such situations, doubts arise. How can electricity be offered so cheaply?
“With the power of an idea”, sums up the CEO of Oulu region electricity, energy advisor Risto Kantola.
That idea is a cooperative idea.
“Our task is to provide affordable services for members, the Cooperative Act says so. With it, we claim our right to be a cooperative.”
Kantola also estimates that the discount increases the attractiveness of the region.
The electricity of the Oulu region owns approximately twice as much electricity as the members of the cooperative consume. There is, for example, hydropower from Norway and Sweden, wind power and a little from Olkiluoto three.
The electricity is sold to the market and there is a profit.
Part of the profit is then “distributed” back to the members as a reduction in the electricity price. Electricity is sold by Oomi. Oulu region’s electricity will reimburse Oomi for its members’ discount in full.
Electricity cooperatives there are only a handful in Finland. Oulu region’s electricity is the largest of them. In general, energy companies are limited liability companies.
“Stock companies distribute the result to their owners in the form of dividends. With us, it happens at favorable prices for members. That’s the difference,” says Kantola.
Cooperative electricity sold to members is also cheap compared to stock exchange electricity. In 2023, exchange-traded electricity has paid an average of about 6.6 cents per kilowatt hour. For the sake of comparability, the price has been calculated for the whole year with 24 percent value added tax.
From the beginning of last December to the end of April, a reduction in VAT on electricity was in use in Finland. At that time, 10 percent value added tax was paid on the electricity sold. The discount did not apply to electricity transmission.
In autumn, electricity has been even cheaper. For example, in September, stock exchange electricity cost an average of 4.1 cents per kilowatt hour. In October, the price has so far been around 4.5 cents per kilowatt hour.
Correction 30.10. 12:10 p.m.: Information added to the article that Muhos also belongs to the Oulu region’s electricity area.
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