– Violates regulations – E24

The electricity deals that now need to be terminated have names like “Full Control”, “Equal Pay” and “Energy Bill”, and can be practical for customers because they pay a fixed amount each month for electricity and grid rent. .

However, these agreements do not comply with the electricity billing regulations, according to the Energy Regulatory Authority (RME), which is part of NVE.

– In accordance with the legislation, the measurement, settlement and billing will be carried out based on measured consumption. That is what these agreements do not do. We have notified several companies to terminate electricity deals that violate regulations, Kjetil Lund, CEO of NVE, tells E24.

The companies that have been ordered to withdraw such electricity deals are Los, Eidsiva Energi, Trøndelagskraft, NorgesEnergi, Hallingkraft, Hafslund Strøm, Fortum Markets, Midt Energi, Orkland and Fjordkraft.

According to the RME, all affected agreements (see fact box) violate the rules that require the bill to be based on regular meter readings. Most also pre-charge for electricity beyond the limit of a maximum of ten weeks in advance. This is regulated in the regulations on measurement, settlement and billing.

Five power companies have already terminated similar agreements after receiving the order notification.

– Create the control impression

The NVE authority, RME, is responsible for ensuring that the electricity market functions properly. So electricity customers should have a reasonable opportunity to track the actual costs associated with their own electricity use.

– These are agreements that create the impression that you have control over your electricity expenses, because you have a fixed amount that you pay, says Lund.

– But in reality the opposite happens, that you lose control, he adds.

As early as October 2019, RME ordered the Fjordkraft power company to abandon the “Full Control” agreement, but the company complained. The NVE authority then chose to wait for the Ministry of Oil and Energy to clarify the matter before issuing several orders to companies with similar agreements.

– The complaint was rejected, so we have now sent orders to several companies to terminate these agreements. Some companies have already terminated such agreements, Lund says.

Compare deals with consumer loans

The electricity deals that the NVE authority is cracking down on can be practical for electricity customers who cannot afford electricity bill surprises and prefer to pay a fixed amount each month.

But the agreements are confusing and it is difficult for the consumer to verify the terms, believes the manager of NVE. He says that some of the agreements in practice work like a consumer loan.

– Some of these agreements imply that you pay a minimum amount, but if you consume more, you run the risk of accumulating debts with the company. So you have to pay high interest rates and it works like a consumer loan, says Lund.

– What’s the problem with that?

– The problem with this is that it violates the regulatory requirement that over time no more than actual consumption should be billed. These are rules that will protect consumers, Lund says.

Several agencies monitor the market

The monitoring of the electricity market is divided into several agencies:

• The Norwegian Consumer Agency, which oversees the marketing of electricity deals.
• The Consumers Council, which runs a price portal for electricity customers, strømpris.no
• The authority of NVE RME, which is tasked with ensuring a well-functioning market with clear agreements for clients.

Last week, the Consumer Council complained to 29 electricity companies from the Norwegian Consumer Agency. They believed the companies had violated the Marketing Law and the Right of Withdrawal Law, among other things due to secret price elements in the electricity agreements.

The Consumer Council believes that electricity providers mislead consumers into unfavorable deals and is now working to improve the price portal strømpris.no.

– The electricity market works well

Despite the challenges, NVE’s manager believes the overall electricity market is doing well.

– Most of the players are serious. But there are also challenges and there are things to pay attention to. There we have a task as a regulatory authority to make sure, as in this case, that what is billed is in accordance with what is used, says Lund.

– There are also questions about marketing, which are dealt with by the Consumer Agency. We have to keep up, but in general I think the electricity market is doing well, he says.

I’m still considering squeezing

In February, NVE announced that electricity market rules could be tightened because electricity deals are too confusing. Lund thought then that the unclear contract terms contribute to confusion and misunderstandings among power customers.

– One must constantly consider whether the regulations in this area work well or whether they need to be tightened, says Lund.

In March, the electricity industry organization Energi Norge came out with E24 and promised to set an industry standard to avoid misleading customers. Energy Norway CEO Knut Kroepelien called for a joint effort to make the electricity market more transparent.

– We envisage a combination of the Consumers Council further developing the electricity pricing portal, and NVE and the Norwegian Consumer Agency cracking down on those actors who do not stay on the correct side of the law, at the same time that we do our part as an industry. Together, this will contribute to a healthier market, Kroepelien told E24 in February.