(Bloomberg) -- Sweden’s government proposed new handouts to homes as surging energy prices threaten Prime Minister Magdalena Andersson’s prospects of re-election next month. 

The proposal, made ahead of the Sept. 11 vote, aims to use some 60 billion Swedish kronor ($5.8 billion) that grid manager Svenska Kraftnat has earned in so-called bottleneck revenue to compensate households and companies for record prices in the wake of Russia’s curbs on energy exports to Europe.

“No responsible politician can promise to compensate every price increase that the horrible war leads to,” Andersson said at a news conference. “But the Swedish population should feel safe in knowing that we will support households and companies, especially those that are hit hardest.”

Energy policy has become a flash point in Sweden’s political debate as a bloc of liberal, conservative and nationalist parties challenge Andersson’s minority Social Democrat cabinet. With no clear frontrunner in the election, they have announced their own policies aimed at alleviating the pain of households and blame the government for a power shortage in the south after some nuclear reactors were shuttered a few years ago. 

Under the new proposals, homes can expect about three times as much as the one-off handouts from last winter.

The debate in Sweden reflects a wider discussion across Europe as the worst energy crisis in decades is forcing lawmakers to draw up emergency blackout plans and how to deal with record power rates just as price for everything from food to petrol is surging too. The UK announced a £15 billion aid package for households in late May, while France in early August approved a 20 billion-euro anti-inflation package for homes.

While Sweden was Europe’s top power exporter in the first half of the year, internal bottlenecks mean that a surplus in the north isn’t reaching the main consumption areas in the south, where prices surged to a record for Wednesday. State-owned utility Vattenfall AB closed down two reactors at the Ringhals plant in 2019 and 2020. 

Sweden Turns to Burning Oil as Power Prices Soar to Record

The dearth of energy means that Uniper SE has cranked up its Karlshamn plant in southern Sweden, which burns heavy fuel oil and dates back to the early 1970s. That reignited the furor from the opposition, which fears that the influence of the Green Party, a former coalition partner of Andersson’s government, could lead to more pressure to phase out nuclear power.  

The Social Democrats have said they would consider every available technology to boost energy production, and Vattenfall will launch a study into building so-called small modular reactors adjacent to the Ringhals nuclear plant, on the nation’s west coast. 

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