[ad_1]
High taxes on electricity have no rational justification, according to industry leaders.
On behalf of NorgesEnergi, Ipsos has mapped the attitudes of Norwegians towards various issues related to electricity. And despite record electricity prices, 46% respond that they believe that the level of taxes on electricity is very high.
– Electricity is a vital necessity. High government taxes on a vital need are completely incomprehensible, NorgesEnergi’s CEO Hans-Erik Ramsdal tells Nettavisen Økonomi.
– There has been a lot of talk that the price of electricity has been historically low in the last year, but people have still gotten big bills. The high level of electricity rates for the state and the rental of the network has become much more visible to the people. I understand well that people think it will be too much.
Also read: Last night, many electricity customers charged for electricity
Not rational
Even more in the survey react to the income of the network. Up to 53 percent believe that the income level of the network is very high. Ramsdal says we need a proper debate on the tax burden on electricity. High government fees are in addition to VAT and network rent.
– Taxes on tobacco and alcohol have a socioeconomic justification in health. These charges are in stark contrast to the electricity tax, which has no rational justification, Ramsdal says.
– What do you think yourself?
– I think maybe the tax level is high due to the fact that this is pure energy.
Low fee
Recent figures from Statistics Norway (SSB) show that of the total price of electricity in the third quarter, the price of energy itself was only 20%. Network rent accounted for 39 percent, the remaining rates 41 percent. The total price of electricity for households was just under 73 øre.
Electricity providers, naturally, compete primarily on price in the battle for customers, where the variance is the surcharge on provider margins. According to the survey, price is by far the most important factor when choosing an electricity supplier.
– Price competition is good for consumers, because it provides cheaper electricity. But then there are some companies that are completely protected from the competition, but that take a large part of the bill.
Also read: Statnett will lower the network rent by 2021
Monopolies
– Network rent is paid to a monopoly market made up of network companies. They do important work, but I find it frustrating that consumers take such a large chunk of the bill for the necessary infrastructure, Ramsdal says.
Ramsdal says it’s not necessarily surprising that so many are negative about high fees. But it’s surprising that rates and infrastructure make up a staggering part of the total electricity bill.
– How do you think the electricity price system and the tax regime should have been ideally established?
– It is up to politicians to discuss and put on the agenda. But we believe that it is not certain that it is correct with such high taxes on a vital good.
It varies
– Regarding the rental of the network, it should be based on costs, but we see that it varies slightly from one area to another in the country.
– But is it correct that electricity customers also pay for infrastructure?
– Yeah, but you wonder how they do it. There is a lot of infrastructure in society that is based on other models. And when network rent and fees are well above 50 percent, we think it’s too high and worth putting on the agenda.
Complicated
He believes that many customers find it difficult to understand the various elements of the electric bill, and customers believe that NorgesEnergi eliminates the full amount of the bill. They don’t, the state keeps most of it.
In September, NVE had to remove the so-called electrical link from homes, a surcharge when the customer’s electricity consumption is at its highest.
– For most people it can be difficult to get used to a difficult model, but it should be profitable to make changes to your own consumption. Consumption is the biggest impact you can do anything about, says Ramsdal.
Also read: Consumers Council warns against electricity deals – here’s why
Stay low
– What do you think of electricity prices in the future?
– Prices change rapidly, but now we have had low prices since February, interrupted by some hikes from time to time. From what we can see, there will be low prices until the new year, but there is always some uncertainty in the winter around cold periods and other things that can happen.
– But market prices indicate that the price of energy will be low in the next 20 years, while the kWh in the highest winter of 2019 was more than 50 øre, responds Ramsdal.
A general rule of thumb is that with normal electricity prices, an average household can expect around NOK 15,000 in total annual electricity costs. It is based on NOK 1 per kWh, including rent and network fees, and a consumption of around 15,000 kWh per year.
Get links
According to the latest statistics from Statistics Norway, only 2% of households had opted for fixed price contracts. In other words, they had chosen to peg the price of energy for a specified period, like the interest rate on a loan for predictability reasons.
With spot pricing agreements, the price of energy will vary with market fluctuations, such as the interest rate on a floating mortgage.
– In general, the spot price is cheaper over time and mainly what we recommend, says Ramsdal.
Advertising
Big Black Week Oakley Sale: Half Price at Best Sellers
