The scheme will provide a deduction on household electricity bills at times when prices are extraordinarily high. When the average market rate for electricity exceeds NOK 70 øre per kilowatt hour for one month, the government will provide a rebate of 55 per cent the amount beyond this ceiling. The scheme will take effect as of December 2021 and remain in place until the end of March 2022.
The scheme will be treated as a subsidy on a product in National Account that will lower the prices on electricity to households. Thus, the scheme will be measured as a decrease in the collected prices on electricity in the consumer price index (CPI) as well as in the harmonized index of consumer prices.
For the consumer price index adjusted for tax changes, CPI-AT, a subsidy on a product will be treated as a negative tax. This means that in the CPI-AT the subsidy will be added to the reduced electricity prices used in the CPI calculation.