CEO of Hoas, the Helsinki region’s student housing foundation Matti Tarhio gives strict criticism to the electricity network company For Caruna.
According to Tarhio’s view, Caruna seems to have started to tighten the entire construction industry by significantly extending the delivery times of cable transfers and connections.
As an example, Tarhio brings up the transfer of the medium voltage cables of the site in Hoas in Maarinsolmu, Espoo, where Caruna has presented a delivery time of 16 months.
Previously, delivery times were about 3 months. In addition, the delivery time for the electricity connection has been announced as up to 20 months.
According to Tarhio, this means that the start of the construction project for student apartments that is being prepared for the site will be delayed.
“The construction industry has suddenly become a pawn in that investments are put on hold with a rather heavy hand. This is now being talked about in the construction industry,” commented Tarhio.
Caruna is the main electricity distributor in 57 municipalities, one of which is Espoo.
In the background, a new control model
The criticism is based on the Energy Agency’s new control model for electricity networks for the years 2024–2031, which came into effect at the beginning of the year.
The essential thing in the new model is that the value of network investments made by companies before this year is frozen, which lowers the reasonable return calculated for network companies.
Caruna, like other electricity network companies, has criticized the new model, because according to the company, it essentially weakens the ability of companies to invest in the network.
Care in the air.
The plight of construction typically has ripple effects on other industries as well, says Hoas CEO Matti Tarhio.
PHOTO: Karoliina Vuorenmäki
Tarhio wonders if the extension of delivery times could be some kind of counter-pull from Caruna, in which case new construction in the construction industry will suffer.
“Their delivery times have changed in a short cycle since the turn of the year. I see a pretty strong cause-and-effect relationship here.”
Tarhio also sees a risk in the procedure described above from the point of view of Finland’s recovery.
“If one actor has the power to regionally stop construction, I find it quite outrageous,” he states.
Finance and Vice President of Caruna Noora Neilimo-Kontio bluntly rejects Tarhio’s criticism.
“It is difficult to see what we would benefit from somehow putting the brakes on the construction industry. Of course, this is not the case,” Neilimo-Kontio says.
“Incredibly sad”
According to Neilimo-Konti, the root cause of the unpleasant situation is precisely the new control methods and the changes that have come to them, which weaken the financial position of the distribution companies, ultimately having a downward effect on the turnover.
As a result, Caruna has also taken adjustment measures to secure its financial situation and financial position. The company has cut this year’s investments by around 60 million euros.
According to Neilimo-Konti, the decreasing investment amounts mean that the company has clearly fewer network construction resources, i.e. contractors.
Therefore, according to him, the company has to more strongly prioritize what network construction projects can be done this year with the available resources.
“Because of this, in some cases the delivery times for subscriptions have been longer than what customers are used to. It is, of course, incredibly sad.”
Difficult to repair
Tarhio says that Hoas is working together as a contractor Curtains made a counter-proposal to Caruna in order to speed up the delivery.
According to him, one option could be that a Caruna operator could handle the delivery, and the customer would take care of the payment in the first step.
“This way we would be able to use the connection earlier and start the construction project. As far as I know, we have not received an answer to this proposal.”
Although Neilimo-Kontio emphasizes that he is unable to take a stand on an individual customer case, according to his assessment, the presented option may be challenging for two reasons.
First of all, there are no more resources in use, even if some customers have the money and the willingness to pay.
“Secondly, it would be somewhat questionable if a customer could, by acting like this, gain an advantage compared to customers who cannot afford this. On a theoretical level, this might not be quite fair,” Neilimo-Kontio says.
Fact
A new control model
The Energy Agency’s new control model for electricity networks for the years 2024–2031 entered into force at the beginning of the year.
The main goals of the monitoring methods are reasonable pricing and the development of the network and network operations in accordance with the needs of customers.
Control methods are used to determine the company-specific allowed turnover for network operations.
The new control methods reduce the allowed turnover of electricity grid companies, especially in the long term, which together with increasing costs, according to the companies, weakens the ability to invest in the electricity grid.