Currently, electricity and gas prices are falling again, but that does not change the lack of competition. The Competition Authority and E-Control criticize “monopoly-like scales” and too little transparency. Then district heating must be investigated.
Electricity and gas prices are high, but most households do not change their tariff. “One in two people has never changed provider,” says E-Control board member Wolfgang Urbantschitsch. Individual providers therefore have dominant market positions; Natalie Harsdorf-Borsch, head of the Federal Competition Authority, even speaks of “monopoly-like entities” on the gas market. You and Urbantschitsch see the slowness of customers when it comes to switching. “It is competition, but no one goes there,” says Harsdorf-Borsch.
Electricity price cap not good for competition
The brake on the electricity price is also counterproductive for competition. If a price is higher than 10 cents per kilowatt hour, the amount above that is usually covered by the state. The consumer has little incentive to switch. That is why the state utilities in particular benefit. Small suppliers, on the other hand, have difficulty gaining a foothold with attractive offers.
One problem is that many customers do not even have an overview of how much they are paying. 84 percent of gas customers do not know their gas price, 68 percent do not know their rate for the kilowatt hour of electricity. Urbantschitsch calls for more transparency and criticizes inconsistent index adjustment clauses. Customers need to know their costs to even make a decision.
High dominance of providers in the countries
Harsdorf-Borsch illustrates the dominance of individual suppliers with some examples from the gas sector: In Vienna, alternative gas suppliers account for only about a quarter. In the second largest network in Lower Austria, EVN has a market share of 70 percent, and for electricity this is even higher. In western Austria, the situation is very clear: there, the state-owned companies achieve a market share of over 90 percent, with a peak of 97 percent in Vorarlberg.
BWB also wants to examine the district heating market
The BWB also sees reason for research in the district heating sector and is now starting a sector study. About 30 percent of Austrians are supplied in this way; the authorities want to look at district heating companies in metropolitan areas in particular.
They have a natural monopoly position there, but are not under the control of E-Control. Prices have been subject to large upward swings in recent years.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
