Oulun Energia as a shareholder of Oomi
In the electricity market, prices have been increasing dramatically in recent months. As a result, many electricity suppliers have been forced to adjust their pricing and products according to the market.
The turbulence in the electricity market has also raised many questions with regard to Oulun Energia, which owns 23.9% of Oomi. In the questions, particular emphasis has been placed on the connection to the electricity sales company Oomi and its product portfolio.
Oomi's operations in the market started on 1 April 2020. Since then, Oomi has made its decisions as an independent company. All of Oomi’s shareholders, including Oulun Energia, aim for Oomi’s success and development. The merger sought to improve competitiveness and drive the development of new products and services. Oomi’s success and development require Oomi to be able to meet the needs of its customers in terms of both pricing and services. Over the past two years, Oomi’s product portfolio has diversified and customer numbers and satisfaction rates have seen positive growth.
We asked Oomi how they would like to comment on the current situation in the electricity market and changes made to their product portfolio. This is how they responded.
“During autumn 2021 and winter 2021–2022, wholesale electricity market prices have reached record highs due to, among other things, the deteriorating water situation and the rise in the prices of fuels and emission allowances. The prices during the most expensive hours have been over 100 c/kWh, whereas the prices have conventionally been around 5 c/kWh. Oomi purchases the electricity it sells to its customers on the market.
When Oomi started on 1 April 2020, the contracts of Oulun Sähkönmyynti’s customers were transferred to Oomi as such. The product Vapaavirta Spot (valid until further notice) has been updated to the product Oomi Active (valid until further notice) in connection with Oomi’s product harmonisation on 1 February 2022. With the update, the basic fee for the contract will decrease by EUR 0.10 per month and the electricity margin will remain unchanged. Both Vapaavirta Spot and Oomi Active are electricity contracts that are valid until further notice and follow electricity market hourly prices. The energy price in the contract is non-fixed and based on the hourly price, i.e. spot price, of electricity for the Finnish price area as published by the Nordic electricity exchange (Nord Pool AS). The price of spot electricity based on the spot price varies according to supply and demand and, therefore, the customer always pays the current up-to-date price for the electricity.
We have not been able to purchase derivatives protecting the Price Cap product (valid until further notice), which is sold as an additional service for Oomi Active, on the wholesale electricity market due to poor availability. For compelling reasons, we have decided to discontinue the product. The Price Cap product, available with the Oomi Active hourly spot contract, has been an additional monthly fee product (valid until further notice) that has protected customers from individual hourly price spikes on a monthly basis. In 2021, Price Cap customers benefitted from the product during 47% of the hours of the year, which means almost every other hour.
We understand that this is an unfortunate decision for our customers who purchased the Price Cap product. The decision to discontinue the product is also a very regrettable one for Oomi. Customers affected by the changes in electricity contracts have been notified by letter one month in advance in accordance with the general terms of electricity sales.”
The strong increase in the price of electricity has presented challenges to both consumers and suppliers of electricity nationwide. Oulun Energia as well as all other shareholders of Oomi have a desire to continue developing Oomi into an even better company in the future. Our common goal is for Oomi to succeed and develop as an independent market operator. If we succeed in this, Oulun Energia and consequently the City of Oulu and its residents will reap the benefits from the partnership.