Competition Authority drops investigation into Fortum's district heat pricing in Sweden

Fortum Corporation
Press release
15 November 2010

Competition Authority drops investigation into Fortum's district heat pricing
in Sweden

The Swedish Competition Authority (SCA) today announced that it has dropped its
investigation concerning the use of market position and price setting of
Fortum's district heating in the Stockholm area.

The SCA launched the investigation in 2007 on grounds that Fortum Värme, in
which the City of Stockholm has a 50% economic interest, is the largest
district heat operator in Sweden and Stockholm is the largest district heat
market in the country. The authority concludes, for example, that the real
price of district heat has in fact decreased in Stockholm by 1.5% during

During the investigation it has become even clearer how important customer
confidence is for district heat providers. Fortum wants to assure its customers
on the fair pricing of district heat by disclosing even more openly its
revenues and the revenue frame required in 2011 for the sustainable development
of its production capacity and networks

"We welcome the SCA's decision to drop the investigation. When criticising the
price of district heating, it is easy to lose sight of the fact that customer
prices are affected by the so-called green tax reform that has raised taxes and
cost of power and heat production in Sweden. The aim of the reform was to
accelerate the transition to a sustainable energy supply. In fact, the costs of
all other heating forms have increased more than our district heating prices,"
says Anders Egelrud, Managing Director of Fortum's heat business in Sweden.

District heating is a convenient and environmentally-benign alternative
particularly when the heat is produced in resource and energy efficient
combined heat and power (CHP) plants that commonly have an over 90% fuel
efficiency ratio. In Stockholm, carbon dioxide emissions have decreased by 60%,
nitrogen oxide emissions by 80% and sulphur oxide emissions by 90% since 1980
largely thanks to the wide penetration of district heating in the city. Fortum
plans to further reduce the environmental impact of its power and heat
production in Stockholm by increasing the share of biomass and waste fuels.

"To date, district heating has enabled Stockholm to become one of the world's
most sustainable capital cities, but district heating shouldn't be taken for
granted. The coming decades call for significant investments in new, efficient
production capacity to ensure that district heating, also in the future, is an
attractive option for our customers both in terms of price and reliability. For
us, it's a given that the new investments will be climate-friendly," Anders
Egelrud concludes.

Fortum Corporation
Corporate Communications

Further information:
Per Langer, Executive Vice President, Fortum Heat Division, tel. +46 70 344 5658

Jens Bjöörn, Head of Communications, Fortum Värme, tel. +46 702 98 41 25