What are the basic charges of the electricity contract?
The basic payment of the electricity contract is a fixed monthly fee that the customer pays to the electricity supplier, regardless of how much electricity is consumed. It covers part of the electricity network's maintenance and administrative costs. Basic fees vary between electricity sellers, network companies and contract types. This article explains what the basic fee covers, why it matters, how it is determined and how you can reduce its impact on your bill.
What do the basic fees include?
The basic fee consists of several components, which may vary depending on the electricity seller and the type of contract. In general, it includes:
- Network service fee: Covers the costs of maintaining and developing the electricity network, including monitoring and upkeep of its use.
- Administrative costs: The electricity seller's administrative costs, such as customer service, invoicing and other office costs.
- Metering fee: Covers the cost of installing, maintaining and reading the electricity meter.
Why the basic fee matters
The basic fee is a fixed part of the electricity bill, and its amount can significantly affect the total cost regardless of how little electricity is used. It covers costs that keep the electricity network operational and able to develop to meet future needs. Because basic fees vary between electricity sellers and network companies, it is worth comparing offers before signing a contract.
How is the basic fee determined?
The basic fee is determined by several factors:
- Electricity network company: Network companies have different pricing structures and costs. Basic fees can, for example, be higher in urban areas than in rural areas, since maintaining and developing the network there may cost more.
- Contract type: Fixed-term, open-ended and exchange-traded electricity contracts may carry different basic fees.
- Size of the electricity subscription: A larger subscription with more required capacity can mean a higher basic fee.
- Customer type: Households, companies and industrial plants often pay different basic fees, since their electricity use and needs differ.
Note that the network company's fee and the electricity seller's fee are usually billed and determined separately, since in Finland you can choose your electricity seller freely but not your local network company.
Tips for reducing the impact of basic fees
Even though basic fees are fixed, you can still reduce their overall impact on your electricity bill:
- Compare offers from different electricity sellers: Basic fees vary between sellers, so comparing can help you find a cheaper option.
- Choose the contract type that suits you: In some cases a fixed-term contract may offer a lower basic fee than an open-ended one.
- Monitor your electricity consumption: While the basic fee itself stays the same, reducing your overall consumption still lowers your total bill.
In summary, the basic payment of the electricity contract is a fixed monthly fee that covers network maintenance and administrative costs. It varies between electricity sellers, network companies and contract types, so it pays to compare your options. For more information about electricity pricing, you can check the Energiavirasto website or contact your own electricity network company.
