What is the difference between electricity and network tariffs?

Are you unsure why your electricity bill is split in two? Then you are not alone. Here is the difference between electricity and network tariffs.

Put simply: The electricity component of your bill is what you pay for your actual electricity consumption, while the network tariff is what you pay for the electricity to be supplied to your home. Electricity charges and network tariffs are two different things but are interdependent, which is why you have to pay for both to use electricity at home.

How network tariffs work

You pay network tariffs to the grid operator that owns the power grid in your area to have the electricity supplied to your home. This means that you cannot choose which grid operator will receive the network tariff because it depends on where you live.

The grid operator sends information about the network tariff you will pay to your electricity supplier. Your electricity supplier then determines how much you will pay for the actual electricity and will add this to your bill. If your electricity supplier has an agreement on central invoicing, your network tariff and electricity charge will appear on the same invoice.

If your electricity supplier does not have an agreement on pass-through invoicing, your network tariff charge and electricity charge will be on separate invoices. Are you unsure whether both charges appear on the same invoice? Contact your electricity supplier.

As well as the supply of electricity, network tariffs cover the cost of operational efficiency and the development and maintenance of power grids and electricity meters. Your grid operator can assist you with questions about power outages and provide detailed information about your electricity consumption, including back in time.

The role of an electricity supplier

An electricity supplier buys electricity from Nord Pool, Nordic power exchange, and sells it to you. It bases its charges on the average purchase price (spot price) set by the power exchange. It has no control over the power grid, and you are free to choose whichever electricity supplier you like.

It is a combination of the price of electricity and your electricity consumption that determines how much you pay your supplier. Your electricity supplier can answer questions about your invoice and your actual electricity consumption.

Why your bill lists both electricity and network tariffs

The reason you receive a joint invoice for both electricity and network tariff is to make things easier for you as a customer. It gives you a better overview of your total electricity costs, and this is the standard practice throughout Norway.

In addition to electricity and network tariffs, your electricity bill also comprises taxes and fees to the state – which all electricity customers must pay.