In 2021, electricity prices will skyrocket. Last year, politicians and companies went to the media to say that the state should help with the electricity bill. The crisis alarm was sounded despite the fact that the rise in prices was about to give rise to a heated economy. At the same time, unemployment was near historic lows and unusually few companies went bankrupt. The government was therefore skeptical of the crisis narratives from business for a long time, but changed its mind during the summer of last year (see fact box). news has mapped what happened to the NOK 2.8 billion that went out to the business community in crisis support: At least NOK 1.8 billion ended up with companies that made a profit last year. Together, these companies had a profit of NOK 5.6 billion. Almost half of the companies that received crisis aid increased their profits from 2021 to 2022. On average, the profits of the recipients of electricity support were NOK 35 million in the crisis year 2022. That is NOK 4.4 million higher than in 2021. The government’s electricity dilemma The winter of 2021/2022 had LO associations and Næringslivets Hovedorganisaison (NHO) asked the government to help companies with their electricity bills. But the government held out for a long time. The corona support during the pandemic had gone to companies that proved not to need support, according to E24’s revelations. Moreover, a power support could create far more headaches than it solved. Even Virke, who speaks on behalf of the companies, believed that such support could make things worse by fueling price increases and was therefore against it. According to news’s information, the government was very concerned about coming up with an electricity subsidy. Among other things, these arguments weighed heavily against: The companies had other options to cover the electricity bill: Unlike people, the companies had an opportunity to shift parts of the electricity bill to the customers by setting the prices. For example, the sausage maker could sell sausages more expensively to cover the electricity bill. In the last couple of years, high energy prices have spilled over into the prices of other goods and services, according to Statistics Norway’s consumer price index. The companies could “insure” themselves against the price risk: The companies that use the most electricity and are vulnerable to price fluctuations had the opportunity to arrange a fixed price for electricity. Legal trouble: A form of state support for the companies could be difficult to get approved by the EU, which must make sure that companies do not get unfair advantages in the competition with others. But the Ukraine war and the energy crisis caused the EU to soften the rules, according to the European Commission. The consumption of electricity could increase: the government was worried about making the electricity shortage worse. The companies could abandon reducing the use of electricity if the government took part of the bill, so that the water reservoirs were drained more. Interest rate fear: If the companies were to receive billions in electricity aid, Norges Bank could choose to raise the interest rate even faster because the companies will have more money to spend than they would otherwise have had. Higher interest would also give the companies another expense. The government reversed itself in August 2022. Then the prime minister said that the government was working on a solution to help the companies. Since the winter, LO had talked more enthusiastically about an electricity subsidy, the price differences between northern and southern Norway had increased, the electricity crisis seemed to be more prolonged, in addition to the fact that the EU rules for state aid had been softened. The industry with billions It is an industry that stands out. At least NOK 1.1 billion, or about 41 per cent of the electricity subsidy, went to companies in the property industry. The government was aware that the property industry could receive a large part of the state aid. But the clear expectation was that tenants would benefit from the support, not landlords. – In the statistics, it looks as if there are many property owners who have received electricity subsidies here. But in reality it is the tenants, the small shops, the business owner on the corner who have benefited from this arrangement, says Minister for Business Jan Christian Vestre (Ap). GIVEN CRISIS PACKAGE: Minister of Industry and Trade Jan Christian Vestre says he did not buy the worst crisis warnings from the business community, but still chose to give electricity support to a number of companies last year. Now news’s survey shows that large parts of the support went to companies with a profit. Photo: Stian Lysberg Solum / NTB One of the rental companies that received support, while making a profit, was Fram Eiendom. They are owned by the Tvenge family. Father Torstein Tvenge is Norway’s 14th richest man, according to Kapital. – I think we, like so many others, felt the pressure as electricity prices rose, says Marius Nielsen, technical manager at Fram Eiendom. They rent out attractive office and shop buildings in the west of Oslo. They were one of hundreds of companies that made a profit last year, but still received electricity support. Fram applied because the tenants asked them to, according to Nielsen. – We applied for electricity support on behalf of the tenants. Not a single kroner has benefited the owners. Everything has gone back to our tenants through reduced common costs, he says. Photo: Fredrik Kampevoll / news Vestre said last year that he would personally follow up that the money ended up with the tenants. – We have had a close dialogue with Enova, which manages the scheme, we were clear in the regulations on how this should be understood. Random checks are of course carried out, so I hope tenants who have not seen anything until these subsidies also get in touch, he says. Not everyone gets a mark in these random tests. – We have not received an inquiry from the authorities to check this, no, says Nielsen in Fram Eiendom. This is how news has worked news has, through data runs, linked accounts with the amounts companies received from the Energy Subsidy Scheme. There are 3,189 companies that have applied for support via this scheme. A total of NOK 2.78 billion has been allocated. 83% of the allocated funds are grants for the implementation of energy saving measures. 17% is for consumption-based grants and auditor costs. Public accounts Of the 3189 companies, news has found public accounts for 2782 companies. These companies received a total of just under NOK 2.59 billion. The remaining 407 companies were either not obliged to deliver public accounts or their accounts were not ready yet. These received a total of just under NOK 0.2 billion. Profit and loss In order to determine whether a company made a profit or a loss, news took as its starting point the operating profit of the registered recipient of the support. If the company belonged to a group, then the group’s operating result will be independent of the subsidiary. news has not investigated whether the group has also made a loss or a profit. Euros and dollars Some companies’ accounts are in euros or dollars. For these companies, the accounting figures have been converted into Norwegian kroner based on the average exchange rate in the given year. Years that are compared When news has compared the average profit between years, we have looked at the companies that have accounts for all years. This is so that the same selection of companies can be compared with each other. – It is completely impossible to create an arrangement that meets the State aid went to pay the electricity bill and to take steps to save energy. As news reported on Thursday, the crisis money ensured that the profits of companies grew. – How effective would you say the scheme has really been, Vestre? – It is completely impossible to create an arrangement that works. There will be companies that receive support that did not need it, and there will be companies that would have liked support and that do not. That’s how it is, says Vestre. – When you know that the support will not be completely accurate, but still turn up billions, don’t you take the taxpayers’ money lightly? – No, not at all. That was the reason why this arrangement was made entirely according to the book. There were some who criticized us for being a bit too bureaucratic, and that you had to send in a lot of documentation, but I believe that when you spend 2.8 billion of the community’s funds on a grant scheme, the only thing missing is that you also provide some requirements. Both for what you apply for and report on, but also have some demands in return that they should invest in energy efficiency measures. They have also done that. Can withdraw dividends next year The government would avoid the owners of the companies profiting from the support. Therefore, the recipients were banned from receiving dividends. But economists believed that some of the money would find its way into the owners’ pockets anyway. Pure state aid ensures that the companies make a larger profit in the long term, which enables the owners to take out dividends and put the state aid in their pockets. Starting with the general meetings over the New Year, the companies will be free to withdraw dividends. – We should be happy that even more generous support was not given to the business world, as both H and Frp propose, says Storting representative Lars Haltbrekken (SV) about the profits for electricity subsidy recipients. Storting representative Nikolai Astrup (H) believes it was sensible to support the companies, even if they actually wanted a different arrangement than the government put forward. – The next time LO and NHO say that there is a crisis, that the companies must have help and state transfers, can you say what the Conservative Party’s position is after we saw what happened with the corona support and the electricity support? – We believe that we should have stable and good framework conditions, both in good and bad times. The state should be careful not to interfere. The company itself must take responsibility for the risk of commercial activities. Having said that, last year we were in an extraordinary situation. During the corona crisis, it was very difficult to see what the outcome would be, how long it would last and how things would go with people’s jobs, says Astrup.
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Gave property landlords 1.1 billion in state aid – news Norway – Overview of news from various parts of the country
