Electricity customers ‘must be paid back’

Over half a million Swedish customers who have overpaid for electricity must repaid a total of 250 million kronor ($36 million) by Finnish electricity company Fortum, Sweden's Energy Market Inspectorate has ruled. But a probable appeal by Fortum means that any windfall payments to customers could still be some way off.

The ruling affects 564,003 customers in Stockholm and on the west coast. The inspectorate found that the company had billed customers in both areas too much in network tariffs in 2003.

“Our investigation has led to the conclusion that Fortum Distribution’s network tariffs were too high in relation to the service that customers received from the company,” said the head of the inspectorate,” Håkan Heden.

The inspectorate started an investigation in 2004 into all electricity distribution companies’ charges for 2003. Until today, 21 companies had been ordered to repay customers a total of 410 million kronor. All companies appealed the decision.

Tuesday’s decision means that customers will be entitled to rebates likely to be worth between 200 and 1,500 kronor. But those hoping for a tidy windfall could be disappointed.

Fortum spokeswoman Lotta Larson said the ruling was “more or less what we expected.”

“We will probably do what all the other companies have done, which is to appeal,” she said. The company can take its case to the District Administrative Court, the decision of which can also be appealed. The whole process is likely to take several years.

Larson said the company had only found out about the ruling via news agency TT, and had received no official notification from the inspectorate, so it had yet to make a formal decision about what to do. But, she said, Fortum was not ripping off its customers.

“Of course we understand that this is the reaction people will have, but our business is to supply something that is very important to society. This money is needed to invest in the future and in the infrastructure.”

According to Larson the model used by the inspectorate to calculate a ‘fair’ price for electricity is “not based on reality”.

“We have identified thirty serious faults in the model. This has been criticized across the industry,” Larson told The Local.