The tagline for hybrid contracts sounds appealing at first — cheaper than their fixed-term electricity counterparts while carrying less risk than hourly spot-price deals. However, some experts warn that the companies' sales pitches might be misleading consumers.
A hybrid contract, or consumption contract as some providers call it, takes elements of both a fixed price and a spot price agreement. In addition to a fixed base price per kilowatt hour (kWh), consumption is also recorded, impacting the total bill at the end of the month.
For customers that use electricity during lulls in grid consumption, this contract would offer them a discount on their overall bill. However, for customers that use electricity during peak hours, it would end up being more expensive.
Difficult to compare to existing contracts
Hybrid contracts, also known as "consumption" or "flex" contracts depending on the company, are relatively new in Finland, and there is little data on how this model works in practice.
Juha Beurling-Pomoell, the Consumers' Union of Finland's general secretary, said it is difficult, if not downright impossible, to compare the new hybrid contracts.
When Beurling-Pomoell compared products on the Energy Authority's official website sahkonhinta.fi, hybrid contracts came out as the cheapest among fixed-term contracts.
"The concern now is that people will accidentally sign up for a contract they don't understand," he told Yle.
The Energy Authority is working out how to separate the products into their own category in the comparison.
Such comparisons with new types of contracts are also difficult because companies report differently on how their consumption habits can affect electricity bills.
According to Beurling-Pomoelll, some companies do not clearly indicate, for example, the times of day when customers should use less electricity.
Jonatan Kanervo, an economist at the Energy Authority, said it is good that consumers have options, adding that consumers need to be aware of the pros and cons of their contracts.
"The consumption impact is calculated by imagining that the customer has a spot price electricity contract. Their average monthly price is then based on their hourly consumption. This 'personal monthly average price' is compared to the actual spot price of electricity for the month. This results in an increase or decrease in the consumer's bill," Kanervo explained.
More expensive than consumers led to believe
The savings generated by this new type of contract are difficult to predict, experts say.
"It is also difficult to estimate how much more expensive the contract could turn out to be if you are unlucky," Kanervo told Yle.
In cold winters, electricity consumption is higher than usual. If there is no wind to power turbines, electricity spot prices rise. On very cold days, even night-time hours can also be relatively expensive, so timing electricity use does not always save money.
The consumption impact is usually calculated based on a whole month, so one price spike can ruin earlier savings.
"For example, in January 2024, electricity prices were very high for the first week, after which the price fell to a more normal level. During this month, the consumption impact could have been much higher than normal," Kanervo explained, citing record-high spot prices earlier this year.
Based on the companies' websites, the consumption impact could be a discount of up to a cent or could tack on just under four cents per kWh.
According to Beurling-Pomoell of the Consumers' Union, electricity companies' promises might not reflect what an individual household ends up paying. He also noted that most of these contracts are still considered fixed-term, which means that the consumer cannot get out of the deals easily.
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