Who decides how much the electricity distribution charge will be?

The Norwegian Water Resources and Energy Directorate (NVE) maintains an overview of the various network operators’ electricity distribution charges at its website www.nve.no. Compared with continental Europe, Norway’s electricity distribution charge is low.

You pay the electricity distribution charge to have the electricity you buy transported from the place where it is generated to your home. The charge is intended to cover the costs of building, operating and maintaining power lines, cables and transformers. A substantial proportion of the electricity distribution charge is made up of public charges (consumption charge, contribution to the energy fund and VAT).

The cost of owning and operating an electricity distribution network varies. Geographical and climatic conditions affect the network operators’ costs. In most cases, it costs more to distribute electricity to thinly populated rural areas than to towns and villages.

On behalf of the Norwegian government, the Norwegian Water Resources and Energy Directorate (NVE) requires that the electricity distribution charge consist of a fixed standing charge and an energy-related component.

A network operator’s costs depend not so much on the individual customer’s electricity consumption as on the overall number of customers the network supplies. The standing charge reflects these costs. The size of the standing charge varies slightly from network operator to network operator. It is also common for different customer groups to pay a different standing charge. Both the consumption charge and the contribution to the energy fund are collected via the energy-related component of the electricity distribution charge.

You pay a price per kWh of electricity you use. Someone who uses a lot of electricity uses the distribution network more and therefore pays a larger proportion of the cost of its upkeep. If you use little electricity, you pay less. The price per kWh is slightly lower in the summer than in the winter.

No. You can choose which electricity supplier you want to use, but not which network operator. You are connected to the electricity distribution network through your local network operator, who is responsible for ensuring that the electricity you have bought is transported to your home.

On behalf of the Norwegian government, the Norwegian Water Resources and Energy Directorate (NVE) determines how much electricity network operators can earn in a particular year. Since there is only one network operator in each geographic area, the NVE audits the companies’ accounts every year to make sure they are not exploiting their monopoly position. Network operators set the price that the individual customer must pay for electricity to be delivered to their homes, but the operators’ overall income must not exceed the cap that the NVE has determined for each company.