Municipal owners back sale, but Palokki plant board holds firm

A majority of the municipal owners of North Karelia Electricity support selling the Palokki hydropower plant in Heinävesi to the state, but the company’s board has not promised to change its opposition, Yle reports.

The government wants to buy the plant, remove its dam and free the rapids for extremely endangered migratory fish. Removing the dam would open up 10 rapids. The company’s board rejected the state’s offer in the summer.

Owners are divided

The municipalities have been deciding their positions in recent weeks, with the final decisions made on Monday. Joensuu, Kitee, Liperi, Heinävesi, Kontiolahti, Outokumpu, Polvijärvi, Savonlinna and Kuopio support the sale. Kaavi, Lieksa, Nurmes, Tohmajärvi, Rääkkylä and Juuka oppose it.

Ilomantsi left the decision to the boards of North Karelia Electricity and North Karelia Energyholding. Tuusniemi proposed that North Karelia Electricity obtain an independent assessment of its 80 million euro valuation of the plant.

Municipalities own shares in North Karelia Electricity directly and through North Karelia Energyholding, which holds more than half of the power company’s shares. Among the shares held by Energyholding, 45.2 per cent are represented by municipalities supporting the sale, while 44.5 per cent are represented by municipalities opposing it. The remaining 10.3 per cent have not taken a position. For direct municipal holdings, 23.7 per cent support the sale, 15 per cent oppose it and 4.9 per cent have not stated a position.

Energyholding chair Teemu Mustonen said the holding company’s majority either opposes the sale or trusts the power company board’s view, which has been against the deal. On that reading, supporters of the sale are in the minority.

Board says it must act in company’s interest

North Karelia Electricity board chair Paavo Haverinen said the board was aware of the municipalities’ views but did not necessarily intend to follow them. He said the board had already made its decision and that nothing had changed. Haverinen cited company law, which requires the board to act in the company’s interest.

Prime Minister Petteri Orpo argued on social media on Monday that the plant has little significance for balancing power or security of supply. According to Orpo, it represents two per thousand of Finland’s hydropower capacity and 0.04 per thousand of the country’s electricity consumption. He described the issue as a choice between the future and the past.

Several opposition MPs, including Krista Mikkonen of the Green League and Timo Harakka of the Social Democrats, have also supported freeing the rapids. The government considers the purchase important because removing the dam would be its most prominent nature conservation action.

North Karelia Energyholding is expected to make its decision in mid-November, followed by the North Karelia Electricity board’s position on the state’s offer in late November. Owners will then still be able to influence the matter, including by demanding an extraordinary general meeting.