In light of the last days’ media coverage and speculations regarding the Norwegian Consumer Council’s (Forbrukerrådet) criticism towards the electricity retail industry, and as the facts of the matter have become clearer, Fjordkraft has decided to release the following statement to clarify the matter to shareholders, the financial markets and to the media.
Firstly, Fjordkraft disagrees with the statements from the Norwegian Consumer Council in this matter.
The Norwegian Consumer Council’s criticism can be split into two key issues:
i) That short-term special offers where the duration of the special price is not explicitly stated are noncompliant with marketing law or the standard contract for delivery of electricity established by Energy Norway (Energi Norge)
ii) That price plans based on the NordPool spot price with an unspecified addition of purchasing costs are noncompliant with the standard contract for delivery of electricity established by Energy Norway
Fjordkraft is mentioned by the Norwegian Consumer Council as one of the retailers where, according to their view on the matter, issue ii) is relevant. Fjordkraft offers this kind of contract to its customers (the majority of Fjordkraft’s spot products include purchasing costs, covering balancing costs, trading fees and credit cost). The customer is informed about this through the terms and conditions in accordance with Fjordkraft’s interpretation of the current rules and regulation.
The financial effect of the addition of this purchasing costs is minimal. Fjordkraft’s total revenue from the addition of purchasing costs to certain contracts amounts to less than 2% of total revenue in the Consumer segment and about 3% of net revenue in the Consumer segment.
Fjordkraft takes the allegations from the Norwegian Consumer Council very seriously and strive to comply with the current rules and regulations in the market. To Fjordkraft’s best knowledge, Fjordkraft’s terms and conditions are in line with rules and regulations as well as established market practice. Because Fjordkraft takes these allegations very seriously, Fjordkraft has initiated a legal review and evaluation of their terms and conditions from the law firm Schjødt. Fjordkraft has also been working with Energy Norway to establish industry standards for sale and marketing of electricity for a long period of time and welcomes increased transparency and uniformity in the market.
-To our best knowledge, we operate well within the current rules and regulations in the market. However, increased transparency and a level playing field is something we applaud and have been working on for a long time, says CEO Rolf Barmen.
-We maintain our financial outlook. The allegations from the Norwegian Consumer Council and possible actions from the Consumer Authority (Forbrukertilsynet) will have a minimal impact on the Group’s profitability and further growth, says Barmen.
For queries, please contact:
Morten A. W. Opdal, Head of Controlling and Investor Relations, +47 970 62 526
Rolf Barmen, CEO, +47 900 80 950