Many municipalities and counties have power sector incomes due to their ownership of utilities or else due to the presence of local generation. On behalf of the Statistical Reports Committee for county and municipal government finance, THEMA has calculated annual revenues from the power sector, resulting from both ownership and hosting, and mapped out how these revenues are allocated.
Power-sector revenues can affect the state of municipalities’ finances, as well as the extent and quality of municipal services. In examining municipal and county revenues from the power sector, we quantified income streams resulting from the ownership of power companies, e.g. dividends, and revenues resulting from the hosting of power-sector assets, notably the provision of concessionary power and the payment of property taxes.
The figure below shows that from 2012 to 2022, municipal and county revenues from the power sector have increased, with most of the increase occurring in recent years. Several of the relevant sources of income fluctuate with the price of electricity and, with record-high electricity prices in 2021 and 2022, municipal power revenues reached new heights. Those revenue streams particularly affected by the electricity price include dividends and the value of concessionary power. Indeed, the value of concessionary power alone accounted for half of estimated revenues in 2022, a sum of nearly 12 billion Norwegian kroner (NOK).
Figure A
We have estimated power-sector revenues at the municipal level and our findings show significant differences in the size of these revenues between municipalities. “Power municipalities” such as Bykle, Sirdal, Modalen, Eidfjord and Aurland have some of the highest revenues per capita. Oslo has the highest absolute revenue from the power sector of any municipality owing to its ownership of Hafslund. Other municipalities with high absolute power revenues include Bergen, Ullensvang, Stavanger and Sandnes (See the figures below).
Figure B
Figure C
Regarding the allocation of these power-sector revenues, a survey of the municipalities suggests that the majority of such revenues support the general financing of the annual budget. However, there are some examples where these revenues are used for specific purposes, including subsidising the electricity consumption of households and businesses in the municipality. The report includes an in-depth examination of how power-sector revenues are allocated for a selection of municipalities.
For more details on our findings, you can read the report via the link below (available in Norwegian only):
