Why do I receive an invoice from Caruna and what does my electricity bill consist of?
The cost of electricity use is divided into three parts: electricity distribution, electrical energy, and taxes. Your final electricity bill will be the sum of these parts. By understanding what your electricity bill consists of, you can better manage your electricity use and save on costs. You will often receive two separate invoices for electricity distribution and electrical energy – one from the electricity network company and the other from the electricity supplier of your choice.
Formation of electricity distribution costs
With the network service fee, an electricity network company, such as Caruna, takes care of transporting electricity to electricity users, building the electricity network, maintenance, electricity metering, customer service, monitoring the operation of the electricity network, and fault emergency service every day of the year. If the power goes out, we fix the faults immediately and keep customers informed through automatic communication.
The network service fee consists of a fixed fee and a component based on electricity consumption. For large electricity users, such as industry, the bill may also include a power-based power fee. The amount of the network service fee (fixed fee and consumption-based component) depends on the electricity network company in your area.
The costs of electricity distribution arise mainly from the construction, development, and maintenance of the network and their financing. The amount of electricity used does not affect these costs much, which is why the fixed fee accounts for a large amount. The fixed fee is always invoiced even if no electricity is consumed. The consumption-based part of the network service fee is usually lower. However, the consumption-based portion may be higher than the fixed fee, for example, for the owner of an electrically heated detached house.
Electricity distribution is always the responsibility of the local network company, which owns the electricity network and charges for its use. Electricity networks form a so-called natural monopoly, which means that there can only be one network company in a given area. Parallel electricity grids do not make sense for reasons of cost and efficiency. Your electricity network company is determined by the location of your home, cottage, or other property.
Your electricity supplier will charge you for the electrical energy you use
The electricity supplier ensures that the electrical energy you need is produced at the electricity production plant.
Your electricity fee also consists of a fixed basic charge and a component based on electricity consumption. Unlike the electricity distribution fee, the share of the basic charge in the invoice received from the electricity supplier is often lower, and the part based on electricity consumption is higher. In other words, the amount of electricity used has an impact on your electricity fee, which you can influence yourself with your own actions.
Your electricity fee depends on your electricity supplier and the electricity contract you have made. You can buy your electrical energy from any electricity supplier. If you wish, you can put electrical energy out to tender and choose the most suitable electricity supplier for you.
Taxes are part of the electricity bill
The taxes on the electricity bill consist of value-added tax and electricity tax.
VAT is paid on both electrical energy and electricity distribution.
A local electricity network company, such as Caruna, also charges an electricity tax on its invoice, which is then remitted to the state. The electricity tax is charged based on electricity consumption, and its amount is stated on the invoice in the same way as the distribution price. VAT is also paid on electricity tax.