Norway to further raise household electricity subsidy

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OSLO, Jan 10 (Reuters) – Norway’s minority government plans to further increase its subsidy for household electricity bills amid a spike in winter season power prices, the energy ministry said.

A rise in the cost of electricity to record highs, part of a Europe-wide surge, has put pressure on the centre-left government to find ways to cushion the blow.

The coalition of the Labour Party and the Centre Party first introduced a subsidy in December, but opposition critics had said that scheme was insufficient.

The cost of the plan will now rise to an estimated 8.9 billion Norwegian crowns ($1.01 billion), the energy ministry said in a statement published on Saturday, from around 6 billion seen last month.

The Socialist Left party, on which the coalition relies for winning majorities in parliament, separately said it would back the revised plan.

The government will pay 80% of the portion of power bills above prices of 0.70 crowns per kilowatt hour (KWh), up from 55% in the plan deviced last month.

The overall cap on consumption covered by the scheme remained at 5,000 KWh per month.

The government has previously presented other measures to alleviate the high-price situation amounting to 5 billion crowns, taking the overall cost to 13.9 billion crowns.

So far this month, wholesale spot prices in southern Norway have averaged 147.98 crowns/kWh, after 177.13 crowns/kWh in December, according to data from electricity bourse Nord Pool.

($1 = 8.8488 Norwegian crowns)

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