The Norwegian parliament has adopted a support scheme for electricity costs aimed at households. When the market price of elspot on average exceeds NOK 0.7 per kilowatt hour for one month, the state will provide direct support to electricity customers, with a support share of 55 percent in December 2021 and 80 percent in as of January 2022. The support is provided for a monthly power consumption of up to 5000 kilowatt hours.
The CPI measures the support scheme for electricity costs as a direct discount on electricity prices aimed at households. The CPI takes the five bidding areas into account when calculating the electricity index. For the bidding area where the elspot prices on average for the month do not exceed NOK 0.7 per kilowatt hour (excl. VAT), the actual market prices paid by households are used. While compensated prices are used for elspot in bidding areas where the average elspot price for the month does exceed NOK 0.7 per kilowatt hour.
The discount is applied to all contract types for electricity that are included in the CPI for the given bidding area. The value added tax (VAT) is added to the price in bidding areas that are not exempt from this.
As for the period from April to December 2022, a reduced While tax on grid rent has also been adopted. The electricity tax is included in the CPI in the calculation of the index for grid rent.
A new scheme for grid rent was introduced 1 July 2022. Previously, the grid rent for private households was independent of how electricity was consumed throughout the month, while grid rent is now differentiated according to the households use of the capacity in the network and whether electricity is consumed during the day, night or weekend. The new grid rent scheme is set to incentivize electricity consumption more evenly distributed throughout the day to reduce the burden on the distribution network.
In which manner private households adapt their consumption to the new scheme will be captured in the price measurements for grid rent in the CPI. As of today, limited information is available about the consumer adjustment, which entails a somewhat greater uncertainty than normal for the price measurement of grid rent in the CPI in July. Statistics Norway has consulted with The Norwegian Energy Regulatory Authority (NVE) regarding which consumption pattern is reasonable to expect for a typical private household in July. In the CPI, the price development for grid rent is published together with electricity prices, and the price change for July shows a modest increase which contribute to moderate the fall in the overall index for electricity including grid rent.