Anti-inflation package – Confusion about the impact on electricity prices

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Anti-inflation package – Confusion about the impact on electricity prices

Energy suppliers must pay more excess profit tax. It is actually unclear whether that actually makes the rates for end customers cheaper. Two effects can occur.

Until mid-2024, the “electricity price brake” applies: up to 2900 kWh annual consumption, each household pays only ten cents per kilowatt hour (including taxes 15.3 cents), if the energy supplier charges a maximum of 40 cents. The state pays the difference, which is a maximum of 30 cents.

Two effects are possible
If the electricity companies lower prices now to avoid paying a government-planned higher “excess profit tax”, it could have two effects:

…Those who are within the electricity price brake will not feel it. Only the state saves extra payments.

…If you consume more, the part above 2900 kWh costs less. Political turmoil was caused by the fact that many providers, knowing about the brakes, charge almost 40 cents for their power.

The energy industry is grumbling
But there is even more resistance: the producers of wind energy have no final customers (they feed from the grid), so they cannot lower prices or escape the higher tax. In the future, this will be made for revenues of more than 120 (for investments in renewable energy) or 160 euros per MWh generated.

Even those who do not generate the electricity themselves, but buy large parts on the market (Wien Energie or EVN), do not benefit from price reductions. Because the excess profit tax only applies to self-production. Experts call the government’s plan “not very well thought out”. This may be because the proceeds from the excess profit tax have so far fallen short of expectations. The whole probably has no effect on inflation.

Source: Krone

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