The total price of electricity consists of three components: sales price of the electricity, the cost of electricity transmission and electricity taxes.
Electricity sales prices
The electricity sales company determines the price of electric energy, i.e., the sales price of electricity.
The price of electricity is affected by many factors, such as the competitive situation, production costs and wholesale electricity prices.
You can choose the most competitive offer from different electricity providers. The electricity provider you choose will bill you for the electricity you consume.
Electricity transmission prices
Finland is divided into regions, each of which has only one distribution network operator, and they are the owner of that electricity network. In Tampere this is Tampereen Energia Sähköverkko Oy.
The distribution network operator charges you an electricity transmission fee. The customer-specific transfer price depends on the transfer product you use. The transfer price is affected by the capital, operating and maintenance costs of the electricity network used for electricity transmission, like underground cables.
As a customer, you cannot choose between distribution companies or prices, however, the Finnish Energy Authority monitors them to ensure they are reasonable. You also pay something for the use of our electricity network based on your consumption. If you consume a lot of electricity, you use our network more and pay more transmission fees.
All of the above is taxed. The total price of electricity is affected by taxes levied by the state, including value added tax, electricity tax and excise duty, as well as the strategic stockpile fee.
Value added tax (VAT) is included in your electricity bill and it is added on top of the basic charges and energy charges that are subject to electricity tax. The excise duty on electricity depends on which tax category you belong to. The strategic stockpile fee is the same for all electricity users. The strategic stockpile is based on Finnish law and it is intended to secure the supply during exceptional circumstances and serious disruptions.
Typically, about 40% of a consumer’s electricity bill is the sales price and the rest comes from transmission costs and taxes.