There’s no main emergency switch he can pull, but Prime Minister Jonas Gahr Støre is promising various forms of financial compensation for Norwegians hit by suddenly soaring electricity bills. The bills have doubled, even tripled, this fall, but those worst off may get some cash relief from the state before Christmas.
Støre’s Labour-Center government has been reeling this week from both soaring Corona virus infection rates and electricity (strøm) bills, and the demands for compensation for the costs of both. He was challenged in Parliament on Wednesday by opposition parties on both the left and the right, not least because electricity bills in Norway are loaded with various fees and taxes in addition to the formerly low cost of electricity itself.
“We’ll be coming with (compensation) packages that will address lots of folks,” Støre vowed from the podium in Parliament. “They’ll help everyone who’s an electricity customer, because everyone is affected.”
Some more than others, though, like a gardening firm that shut down and laid off workers because it couldn’t afford to heat its greenhouses, or one woman who claimed she had to sell her dog to pay her latest bill. Businesses in general have been warned to brace for electricity costs that are at least 50 percent higher than last year, while the farm lobby is already demanding that food prices should rise even higher than they are, to compensate them for their higher costs. Most Norwegian households, meanwhile, are getting bills for several thousand kroner this month, and the high electricity rates are expected to continue through winter.
The government’s first relief package is earmarked for an estimated 100,000 low-income Norwegians who already receive monthly housing support (bostøtte). They’ve been promised an extra NOK 1,500 (USD 160) in their December welfare payments.
“We propose increasing their support a lot throughout the winter,” Støre’s new government minister in charge of local governments, Bjørn Arild Gram, told state broadcaster NRK on Wednesday. “It’s important to quickly reach many of those who are worst off before Christmas, so they can handle the higher electricity costs.”
Their monthly support will rise by NOK 1,500 a month to March, plus another NOK 150 for each person living in the home, if Parliament approves the government’s plan. The relief will cost the state around NOK 500 million, with another NOK 100 million earned for welfare recipients who don’t qualify for direct housing support.
Students who can document higher electricity bills will also be eligible to receive a cash payment of NOK 1,200 plus NOK 1,800 that will be added to their student loans. The government minister in charge of higher education, Ola Borten Moe, told newspaper VG that the extra money will be deposited in their bank accounts in January.
With Norwegian households expected to be hit with NOK 35,000 in additional electricity costs on average through the autumn, winter and spring, the government is also under pressure to cut Norway’s 25 percent VAT on electricity bills or other fees, but details were unavailable. Støre said his government needed more time to make sure their relief packages will target needs, but he vowed they’ll “benefit all households.” He also said his government will be meeting with power companies to discuss possible postponements of payments.
Power companies are already introducing a new system for billing the costs of power delivery to customers (called nettleie) that come in addition to the cost of the power itself. The goal is to get Norwegian consumers to spread power consumption over the course of the day or evening, to relieve heavy demand in peak periods like late afternoon or early morning. The system is meant to offer financial incentives for those able to run washing machines or other appliances in the middle of the day, when energy demand is lower, and thus also postpone new costs of additional cables needed to deliver electricity in peak periods.