In September, your correspondent wrote that the Helsinki power company, Helen Oy, (Helen Ltd in English) that produces electricity and heat has increased its power tariffs to a level that is not related to its own cost of production nor to any significant increase in its investments. You can seen their sources of power in their graph above…
These increases in costs are unjustified and extremely harmful for both consumers, commerce and industry as well as for the third sector both in the public and private sector.
They actually harm the supply of basic services, and are causing consumers and the bodies listed above severe financial difficulties, the results of which will cause unemployment to rise and tax revenues to fall.
The results of this madness will cause hardships amongst the elderly, young families, and those who have low incomes. Small companies are struggling to survive for the same reasons…
It is time for action!
Helen is 100% owned by Helsinki’s taxpayers and we have been paying between €0,04 and €0,06 for each kilowatt hour (kWh) for the last decades. Now, this year, we are seeing prices that are way above €0,30 per kWh which is some 5 to 7 times higher. Nothing has happened in Helsinki or in Helen to justify these price increases. They still have the same power plants that we have invested in, which include nuclear power, ground heat, wind and solar panels as well as a relatively small amount of fossil fuels that they foolishly decided to keep.
They appear to justify these prices because of Putin’s war in Ukraine and because that has increased European demand for power. But that has nothing to do with Helen or Helsinki.
Helen appears to be selling cheaply produced electricity in the open markets using our power plants, and then buying back expensive electricity from the same markets?
If that is the case then taxpayers are justified in demanding to know why we are being forced to pay these high prices and why is our low-cost capacity being used for others rather than for our benefit.
Would you allow your husband or wife to rent out your home that your jointly own and then ask you to move into a smaller rented home? Hardly!
These municipal utilities were originally part of the municipal system, but the banks and private power companies wanted to force these municipal bodies to become companies because they claimed that power generation is a commercial activity. However, this may be partially commercially but it is also an important basic infrastructure which feeds our own economy in Helsinki – without it we would not be so competitive. It is too valuable to sell off or treat it as a commercial activity like clothes or television manufacturing…
The main lobbyists pushing these commercial ideas were banks, the big consulting companies, a few “private” power companies and their lobbyists in the right side of politics. They wanted to stop these taxpayer-owned companies from getting low-cost financing from their municipal banks with municipal guarantees. There are huge profits to be earned by this “commercialisation”, or which consumers are now being asked to pay for.
However, the right wing neo-liberals won that fight, and the only changes were that the same bodies became companies with the same owners, but with higher costs. The senior bosses increased their salaries, the costs of financing increased dramatically, and then their traders started to speculate in open power markets like never before!
So here we are now with high-cost electricity that some politicians are rightly calling “blood money”! They are right.
Other politicians are demanding a windfall tax on the huge extra profits these companies are now unjustifiably producing. This is nuts because the money then does not go to those in need, be them consumers, schools, hospitals, and companies. The windfall tax revenues goes to the government and not directly where it is needed.
The only way to change things is to stop needless trading of electricity of public owned or controlled power companies. This can be done by putting a cap on what small buyers of energy pay for their electricity. The big boys can look after themselves… they do not need handouts from the government.
All we need is to make a law that says consumers and small buyer of electricity should only pay what they have been paying the last ten years with some small adjustments for inflation so long as Putin war continues.