- We have introduced measures to help people deal with high electricity bills in the coming months. We cannot count on support systems over time. Instead, we have to work with long-term measures that ensure the safety of Norwegian electricity consumers. An important part of this work is to facilitate the conclusion of fixed-price contracts that are better and cheaper than they are today. It can provide financial predictability to those who need it, as can a fixed-rate loan agreement, says Finance Minister Trygve Slagsvold Vedum.

Electricity producers should offer fixed-price contracts to energy suppliers

The government held introductory meetings with representatives of the energy industry. The industry has made clear that price protection and fixed price contracts are a prerequisite for a well-functioning electricity end-user market. Industry representatives believe that producers electricity producers should offer fixed price contracts to energy suppliers. Energy resale should be arranged through fixed price contracts for households and businesses in the retail market.

In today's land rent tax, the main rule is that capacity is valued at the spot market price. According to the industry, this means that the tax risk becomes too great if the scope of long-term fixed-price contracts becomes broad.

- What we are doing now is important for people's predictability. Support systems should be temporary and rather replaced by the real possibility of ensuring financial predictability through fixed-price contracts. This is not only important for the business environment, which is not covered by electricity support schemes, says Petroleum and Energy Minister Terje Aasland.

These changes could lead to lower prices for fixed-price contracts than they are today

The government has launched a study of standardized and transparent contracts, including fixed-price contracts, for the retail market. In addition, the government will work to amend the land lease tax for volumes resold at a fixed price under such standard contracts. The rental tax will be assessed in connection with the work on standardized fixed-price contracts.

According to industry representatives, these changes may lead to lower prices for fixed-price contracts than currently electricity.

- I expect the industry to quickly follow what it has signaled. As a result, those who need financial security will be able to secure themselves with contracts at fixed prices lower than those that exist today, says the Minister of Finance.

In further works it is assumed that prices will be set for 3, 5 and 7 years, respectively, and that there will be a maximum increase in prices in the connection between the production company and end users. Additionally, it will be emphasized that the change in the rent tax must be shaped in such a way that the measure does not allow for a tax adjustment.

The report will be sent for consultation as soon as possible. The aim is to hear the case in the Storting during the fall session of 2022 and the introduction from January 1, 2023.

The government is also working on further measures for a well-functioning electricity end-use market.

Source: regjeringen

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