Elenia’s electricity distribution surplus will be offset during the current regulatory period of 2016–2019

 

“Our surplus of 79.1 million euros will be offset already during this year. Our deficit for the previous year is approximately 48 million euros and for the current year it is estimated to be approximately 40 million euros”, says Elenia Oy’s CEO Tapani Liuhala.
 

Elenia had regulatory deficit after both the first (2005–2007) and the second (2008–2011) regulatory period.  Also after the fourth regulatory period Elenia is estimated to have a cumulative deficit. The 10-year Finnish government bond yield that is used for the calculation of allowed return declined considerably during the previous regulatory period (2012–2015), resulting in the majority of the DSOs reporting surpluses. 
 

“For the purpose of renewing the electricity distribution network, it is important that the regulation methods enable steady and moderate tariff development while securing the continuity of investments through the possibility to even out deficits and surpluses over consecutive regulatory periods”, Liuhala comments.  
 

Elenia’s investments into weatherproof network are approximately 600 million euros during 2012–2017 and over 120 million euros in 2017 alone.  
 

“It is a fact that households, enterprises and the society are growing less tolerant towards power outages in the future. Consequently, since 2009 we have carried out without interruptions our investment programme targeted at improving the security of supply. Also the amendment to the Electricity Market Act in 2013 placed additional requirements on the security of supply.” 
 

“We need to replace the decades old overhead lines in any case. Our approach has been to use underground cables, which is the best and most responsible alternative considering the future needs of the society. Our analysis confirms that underground cables are more efficient than overhead lines when considering the entire lifecycle”, Liuhala emphasizes. 
 

He also reminds us of the costs of the weather-related major outages in the recent years. “In the current decade, storms and snow loads have caused us more than 20 major power disruptions. The related costs have been 70 million euros. This includes almost 34 million euros of compensations paid out to the customers,” Liuhala points out.  

 

“Our long-term focus enables us to maintain tariff stability in line with the objectives of the Electricity Market Act. Our price increases have been modest: 3 percent after tax increase in 2012 and 6 percent after tax increase in 2016. And the network weatherproofing project will improve employment for two decades within out network regions of Häme, Pirkanmaa, Central Finland, Southern and Northern Ostrobothnia.”