What is the difference between an electricity seller and a network company?
The seller of electricity and the network company have significant differences that affect how electricity is delivered and billed to consumers. This article discusses the roles and tasks of these two actors in the electricity market.
Electricity seller
An electricity seller is a company that sells electricity to consumers and businesses. The electricity seller buys electricity from the wholesale market and resells it to its customers. The tasks of the electricity seller include, among other things:
- Purchasing electricity from the wholesale market
- Making electronic contracts with customers
- Determining the price of electricity and invoicing
- Customer service and advice
The electricity seller can offer different types of contracts, such as fixed-term contracts, open-ended contracts or exchange-traded electricity contracts, where the price varies according to market prices. Consumers have the freedom to choose their electricity supplier, and they can compete for the price of electricity to find the cheapest option for themselves.
Network company
The network company, i.e. the electricity network company, is responsible for the transmission and distribution of electricity to consumers. The network company owns and maintains the electricity network, which consists of, among other things, power lines, transformers and distribution stations. The tasks of the network company include:
- Electrical grid construction and maintenance
- Transmission and distribution of electricity to customers
- Invoicing for online services
- Fault repair and power outage management
The network company operates in a certain geographical area, and consumers cannot choose their network company in the same way as the electricity seller. A transfer fee is charged for the network company’s services, which appears as a separate item on the electricity bill.
Summary
In summary, it can be stated that the seller of electricity and the network company are two separate actors that have their own roles in the electricity market. The electricity seller is responsible for purchasing and selling electricity to customers, while the network company is responsible for the transmission and distribution of electricity. Consumers can choose their electricity supplier, but the network company is determined by the place of residence.
You can read more information on the subject, for example, at Energiavirasto’s website or From the electricity price website.
