– Not enough to avoid a sharp rise

Less than 20 minutes ago

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Friday reported Statnett that the company will cut its Internet rental quota until 2023 so that customers can reduce their costs by NOK 11 billion.

Grid companies and the energy organization Energi Norge have been working to get Statnett to make this move and are satisfied.

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But Statnett’s action isn’t enough to prevent a sharp rise in internet rent, they warn. Internet companies in southern Norway risk having to increase Internet rent by a couple of thousand kroner per year.

For BKK Nett, anything can happen this fall.

– Together with Energi Norge, the network companies have been working to get Statnett to lower the tariff. We are very happy with today’s decision, but unfortunately it is not enough, says communications manager Svein Ove Søreide of BKK Nett at E24.

It can increase by “a couple of thousand”

BKK Nett is the second largest network company in the country with 260,000 customers, only beaten by Elvia, which is made up of the former companies Hafslund Nett and Eidsiva Nett.

Both BKK Nett and Elvia increased net rent in May. For BKK Nett customers, it increased by around NOK 1,200 per year, while Elvia increased it by just over NOK 1,000 per year.

For BKK Nett customers, Internet rent can now increase by another couple of thousand kroner for a regular family, even as Statnett has cut its Internet rent share.

The reason is that regional and local grid companies have to shell out a lot of money to cover the loss in the power grid. They have to cover every kilowatt hour lost during full-price transmission – and the price of electricity in the south of the country is at a record high.

– Grid companies have extraordinarily high costs due to high electricity prices. For BKK Nett in the NO5 price range, network loss costs are fivefold compared to a normal year, says Søreide.

Recently, the price of electricity in southwestern Norway (NO2 price zone) has been even higher than in the BKK Nett area. For NO2 grid companies, the costs could therefore have increased even more, he points out.

Statnett cuts Internet rent by 11 billion Danish kroner.

Looking forward to a “strong increase”

Søreide claims that BKK Nett has run a NOK 700 million deficit due to skyrocketing electricity prices.

– Statnett’s proposal reduces our costs for the rest of the year by perhaps NOK 100 million. When we are already 700 million in the red, this move by Statnett is sadly not enough to avoid a sharp rise in internet rent, Søreide says.

He says the big grid companies, along with the sector organization Energi Norge, have had a dialogue with the Ministry of Oil and Energy.

– We have a good dialogue with them and we hope we can solve this problem without customers becoming losers, says Søreide.

– But if we do not put an extraordinary solution in place together with the authorities, there could be a rapid increase in prices on our part this autumn which corresponds to a couple of thousand crowns for a normal family, he says.

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– Several thousand crowns

Energi Norge confirms that the net rent can increase by several thousand crowns.

– Grid companies in southern Norway are in a very serious situation with high transport costs due to high electricity prices, which are not covered by the current grid fee, writes Kristin H. Lind, director of the grid and Energi Norge’s electrical system in an email to E24.

– This can lead to an increase in online rent by several thousand kroner per household, he adds.

Part of the power is lost in transmission in the grid. When network companies need to cover this, they have good reason to invest in reducing losses as much as possible. The system has been around for a long time, but it has never been as expensive as it is now.

According to Lind, Energi Norge and the grid companies have been working for several weeks to get Statnett to pay back the extraordinary income from the transfer of electricity to electric customers more quickly.

– What Statnett is doing now is good, but not good enough to avoid a sharp price hike. The Internet industry wants to protect people as much as possible from rising Internet rent in addition to very high electricity prices, Lind writes.

– We have a good dialogue with the Ministry of Oil and Energy to find solutions that can prevent a possible price shock. Statnett has billions in extra revenue that, even with today’s announced price cut, doesn’t reach customers, he writes.

550 million more in costs

Network company Lnett (formerly Lyse Elnett) also has significant additional costs due to very high electricity prices which make it expensive to cover losses, says communications manager Ingvild Ween in an email to E24 / Aftenbladet.

“We have worked to prevent costs from being passed on to our customers in the form of increased Internet rent,” writes Ween.

But Statnett’s net rent cut isn’t enough to avoid a net rent hike, Lnett says.

“Lnett has had about NOK 550 million more costs so far this year than in 2019 due to high electricity prices. This cost is not covered by today’s online rent,” writes Ween.

“According to the regulations, the costs of transporting electricity to customers must be covered through the network rented by our customers. This can lead to an increase in online rent by several thousand crowns,” he adds.