Two days before Christmas Eve, the Storting decided that municipalities and county municipalities with income from licensing power in areas with high electricity prices will receive a one-year reduction in the framework subsidy of a total of NOK 3 billion in 2023. – It is right and reasonable that these give some of the additional income back to the community, explained Municipal and District Minister Sigbjørn Gjelsvik (Sp). The revenues of the power municipalities were NOK 4 billion in 2021. For comparison, calculations show that they amount to NOK 13 billion in 2022 and NOK 11 billion this year. Just as fully, several power municipalities react with resentment to the adjustment. The background for the decision Sigbjørn Gjelsvik (Sp), Minister for Municipalities and Districts – The high power prices we have now seen over time in southern Norway means that most of the host municipalities that received licensed power here have much greater income growth than in a normal year. We think it is right and fair that these municipalities give some of this additional income back to the community. These additional incomes are used in the national budget, among other things, to compensate households and businesses that pay high electricity prices and also to equalize social and geographical differences – The Government has been concerned that the tax should be in a reasonable relationship with the actual incomes. Some municipalities, for example, have tied up the sale price in long contracts and have revenues that are far below the current market price for power. In order to obtain a reasonable distribution of the draft, the government gave the municipalities the opportunity to report in legally binding agreements and other disposition of the concession power. The government has taken this into consideration. Stakaldefoss power plant is a hydropower plant in Sunnfjord municipality in Vestland. Photo: Oddmund Reisæter Haugen – Someone has smoked their socks – I don’t know how this is calculated, but something here is completely insane, says the mayor of Voss herad, Hans Erik Ringkjøb (Ap). Roy Egil Stadheim (Ap) is mayor of Vik municipality, which next year will have its framework subsidy halved (from NOK 118 to NOK 69 million). – Here I think someone has smoked their socks on the Christmas table in Oslo, he says to Sogn Avis. He points out that municipalities that distribute power to their own residents instead of selling it do not get a reduction. What is licensing power? Concession power is electricity that power producers must sell to the host municipality as part of the concession agreement. The purpose of licensed power is to ensure that the development municipalities have sufficient electricity for general electricity supply at a reasonable price. The municipalities can either use this power for the benefit of the residents or sell it. It is the Norwegian Directorate of Water Resources and Energy (NVE) that calculates the basis for how much power the municipalities will receive, and the price to be set for the licensed power. The concession power price for 2023 is set at 11.77 øre per kilowatt hour. This is an increase from the price for 2022, but far below inflation of 6.5 per cent. Source: nve.no news has been in contact with mayors in a dozen typical “power municipalities”. – I agree with Roy Egil, but would like to put it a little differently, says mayor of Kvinnherad, Hilde Enstad (Ap). Mayor of Masfjorden municipality, Karstein Jon Totland (H), thinks his colleague in Sogn is not taking it hard enough: – I understand what Roy Egil is saying. But here the politicians in Oslo have smoked more than just their socks, he says. – It is right and reasonable that the power municipalities give some of the additional income back to the community, says Minister for Municipalities and Districts Sigbjørn Gjelsvik (Sp). Photo: Tom Balgaard / news – The ministry must clarify how they have arrived at the speech KS director Helge Eide says he has “registered some strong reactions” out in Commune-Norway and wonders if the basis for the move is well enough formed. – The most important thing now is for the ministry to clarify how they arrived at the distribution figure, he says. – The basis for deductions should be actual additional income above a reasonable “normal” level Helge Eide, area director society, welfare and democracy in KS – Initially, KS has also understood the need for an intermediate, one-off deduction in the framework subsidy for municipalities with income from concession power this year, which has been revealed, has been clearly higher than what was budgeted for at the start of the year – as a contribution to cover large public expenses for electricity support for households this year. But it has been a prerequisite for this deduction that no one should deduct more than actual income. And we also believe that the basis for deductions should be actual additional income above a reasonable “normal” level of concession power income for each individual municipality. We have also recorded partly strong reactions from several mayors in power municipalities to the move that has now been made public, which may indicate that, in any case, these municipalities believe that this requirement has not been met. We do not have information beyond the press release and the distribution figure itself about how the ministry has arrived at the actual distribution of the allowance. So we believe that the most important thing now is for the ministry to clarify how they arrived at the distribution figure. And should it turn out that some individual municipalities here have been allocated an unreasonable allowance, it can be adjusted, for example, in RNB in the spring. Jon Rolf Næss, leader of the National Association of Vasskraftkommunar (LVK) – We are critical of how the state has calculated this. It looks like some municipalities are getting an unreasonably high deduction in relation to the real income they will have in 2023. We will look at this more closely at how the ministry has arrived at this distribution. From the National Association of Hydropower Municipalities (LVK) it is said that the redistribution “touches on an important basic principle – namely that those who sacrifice natural resources should be compensated for it, both in good and bad days”. – It looks like some municipalities get an unreasonably high deduction in relation to the real income, says LVK head Jon Rolf Næss. In Lærdal, the municipality is likely to lose the entire framework subsidy of NOK 92 million. This is almost a third of the municipality’s total budget (NOK 300 million). – We do not understand the calculation, and are working to get clarity on what has happened, says Lærdal mayor Audun Mo (Ap). He specifies that, on a general basis, it is “good policy to take from the rich and give to those who struggle”, but that all redistribution must be reasonable. – A one-year move is fine as long as it is fairly calculated. But we come out significantly worse than if we had not had power. And it can’t be like that. In the first half of 2022, Ullensvang municipality had NOK 104 million in revenue from licensing power. Photo: Leif Rune Løland / news – Noko is maddeningly mad The Labor leadership of Jonas Gahr Støre and Kjersti Stenseng have announced that they will meet the mayors on 16 January. County mayors in Vestland, Jon Askeland (Sp), encourage the ministry to hold a similar meeting (see below). – The Minister of Local Government must have a meeting with the municipalities Jon Askeland, mayor of Vestland – I agree in principle that there is a one-year withdrawal from municipalities and county municipalities, which have had extraordinarily high incomes, as long as the state redistributes them, and that they do not the state richer at the expense of municipalities and county municipalities. For Vestland county council, the move is in line with expectations, as we have sealed most of the power on long contracts, and have documented the use of the additional income as the state asked us to. However, for some of the municipalities, the move has been dramatic, and I asked the Minister of Local Government to hold a meeting with the municipalities that have received large moves late in the year. Helge Orten, fiscal policy spokesperson for Høgre – Høgre believes it is right that municipalities and county councils with extraordinarily high incomes as a result of high electricity prices also contribute some of this extra income to cover the compensation schemes for households and businesses. This is an interim measure in a situation with high electricity prices. On Monday evening, Local Government Minister Sigbjørn Gjelsvik told news that “municipalities that have questions about the calculations can get in touch” (see below). – There is a big difference between the municipalities because they have allocated the power differently Sigbjørn Gjelsvik (Sp), Minister of Municipalities and Districts – I see that some municipalities have laid out a certain number of moves, but the government has never presented a model for how the move should be done specific. The government has said that the move must be made on the basis of actual values that can be realised, and that is precisely why we are opening up for a voluntary report from the municipalities with a deadline of 1 December. – We have considered legally binding agreements and other political decisions that were made before the scheme was announced, which the municipalities have reported to us. There is a big difference between the municipalities because they have allocated power differently. At the same time, it is important to emphasize that we have planned for municipalities that get a move to still be left with large net revenues from the hall of concession power next year. – We have said all along that we will follow developments closely and that we will return to this in the revised national budget if necessary. We have also said that municipalities that have questions about the calculations can get in touch. The ministry has a dialogue with all the municipalities that want and need it. The Storting will adopt a new system for income distribution during 2023. The Government’s Revenue System Committee proposed in August that power municipalities should share 10 percent of the income with other municipalities. The very next day, Heidi Greni, municipal political spokesperson for the Center Party, announced that the proposal was too dead to count. – None of this will happen with the Center Party in government, she said. Previous attempts to redistribute Norwegian power billions have also failed. In 2020, the Solberg government turned around after large protests. In the record year 2022, Vestland county had NOK 287 million in power income. The forecast for 2023 is NOK 427 million. – A breach of the social contract between municipality and state In the Hurdal platform, the government says that local communities that make natural resources available should get more in return. – It is important to be aware that the income of the power municipalities is compensation from society at large for destroyed nature. Tampering with this institute is the same as breaking a social contract between the municipality and the state, says Petter Sortland (Ap), who is the mayor of Høyanger. He characterizes the reduction to his own municipality as “broken”, and adds that the reduction should apply to all municipalities with electricity revenues, not just the municipalities in the price ranges NO1, NO2 and NO5 (roughly speaking: Norway south of Dovre). – I think it’s strange. That cannot possibly be the purpose of the arrangement. Here, all municipalities with power revenues should contribute, so the drawdown would have been smaller for everyone.
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Mayors revolt after billion-dollar cuts to the power municipalities – news Vestland
