Norway bolsters public control of hydropower

By John Acher

OSLO, March 14 (Reuters) - The Norwegian government proposed on Friday to reinforce public control of hydropower production assets, and energy-intensive industry said the planned law amendments would hamper industrial development.

Nearly all the power produced and consumed in Norway comes from hydroelectric plants which in rainy years generate a surplus for export, though in dry years the Nordic nation imports some power.

Public control has been central to Norwegian management of hydropower resources since 1909, and the proposals aim to ensure that hydropower remains public property, energy officials said.

The legislative amendment became necessary when Norway lost a case last year in a European court on its rules on ownership of hydropower concessions, after European officials maintained they discriminated against private owners.

"Minister of Petroleum and Energy Aaslaug Haga stresses that the amendments will secure and strengthen the public ownership of waterfalls and hydropower stations at state, regional and local level," the ministry said.

The proposal preserves a system whereby hydropower concessions granted to private companies revert to the state once the concessions expire, while public owners retain their rights to hydropower resources in perpetuity.

If concessions to waterfalls and power plants are sold by private owners to public bodies, fixed-term concessions can be coverted to perpetual rights, in line with the current system, the ministry said.

A rule allowing private investors to buy up to one third of the shares in a public power company will be retained, but to ensure public control the limit will not be raised, it said.