10 May 2017
The Finnish Competition and Consumer Authority (FCCA) has investigated the effects of Finnish Energy’s time-based measurement of electricity transmission on the electricity sales market. No proof for was found that competition was restricted, so there is no need to continue the investigation.
Finnish Energy’s Network Council recommended in October 2015 that all electricity transmission companies should apply the same time-based measurements in their transmission tariffs. The FCCA initiated its own investigation in the matter in early 2016 having been contacted by customers of the capital region’s electricity transmission companies.
The FCCA studied the effects the recommendation had on two-rate time-of-day electrical energy products sold to retail costumers. Electricity suppliers offer two-rate time-of-day night and season electricity products, meaning that energy consumed during the daytime or during winter is more expensive than at other times. Typically this applies to those who have electric heating.
As a result of Finnish Energy’s recommendation, the time-based electricity prices of the more expensive daytime hours applied by the capital region’s electricity transmission companies increased considerably compared to the cheaper night prices. The change had an effect on the prices of two-rate time-of-day electrical energy products.
The Competition Act and the European Union’s competition rules ban decisions by business consortia, the purpose of result of which is that competition is significantly prevented, limited or distorted. The ban concerns decisions by business consortia that limit or control the use of competitive measures of companies that are competing with each other.
The FCCA’s investigation did not find evidence that the purpose of the recommendation on two-rate time-of-day electrical energy products was to unify the competitive behaviour of electricity transmission companies and to restrict competition in the retail sale of electricity.
According to the FCCA, the prices of two-rate time-of-day electrical energy products have not risen as a result of the recommendation, because the electricity suppliers who increased the number of more expensive daytime energy hours decreased the sales prices of two-rate time-of-day electrical energy products to compensate for the price increase.
The FCCA emphasised that the harmonisation of electricity transmission companies’ time-based measurements following the recommendation may lead to better competition in electrical energy market as the electricity suppliers’ two-rate time-of-day electrical energy products are compatible with all electricity transmission companies’ transmission tariffs.
Additional information: Director Valtteri Virtanen tel. +358 (0)29 505 3621 and Research Officer Pontus Ranta, tel. +358 (0)29 505 3747.
Sound and effective economic competition entails that companies are free to enter the market and to freely decide about their practices and means of competition. The Finnish Competition and Consumer Authority (FCCA) protects sound and effective economic competition by intervening, where necessary, in restrictive practices, such as cartels and abuse of dominant position, violating the Competition Act and Articles 101 and 102 of the Treaty on the Functioning of the European Union.Restraints on competition are investigated both on the FCCA’s own initiative and on the basis of complaints. The intention is to intervene with major competition restraints as regards the performance of the national economy, harmful to sound and effective economic competition.
Read more about competition restrictions