So the price brakes should relieve

What has changed compared to the previous announcements regarding the gas price brake?

Die gas price brake should not only take effect from March, as originally planned by the gas commission and the government, but retrospectively from January. The federal states have thus pushed through one of their central demands from the last Prime Ministers’ Conference. They had complained about a “winter gap” if there were no reliefs in January and February after the emergency aid in December. The government has now bowed to this, the expected additional costs for the two extra months amount to around 5 billion euros. These come in addition to the 33 billion euros that were initially planned for the gas price brake for households and small businesses for the period from March to the end of April 2024. The money comes from the Economic Stabilization Fund (WSF), which was recently filled with 200 billion euros with the help of loans.

What do gas customers have to be prepared for?

For private households and small and medium-sized companies, the gas price will be capped at 12 cents gross per kilowatt hour from January 1, 2023 to April 30, 2024 – not for the entire consumption, but for 80 percent of the kilowatt hours from the previous year. The 12 cents is roughly twice the pre-crisis level. According to the comparison portal Check 24, the suppliers recently demanded an average price per kilowatt hour of 16 cents. However, consumers will not feel the price cap until March. According to the government’s plans, the energy suppliers should then reduce the monthly advance payments and also settle the credits for January and February, without the customers having to do anything. The energy suppliers had argued that earlier relief than in March was organizationally impossible. District heating customers should get 80 percent of their consumption forecast for September 2022 at a gross energy price of 9.5 cents per kilowatt hour.

What is planned for the electricity price brake?

A regulation similar to that of the gas price brake. Although January was planned as the start date for the electricity price brake, associations such as the BDEW warned that this is not going to work any time soon. Therefore, the implementation in March is to take place retrospectively from January. Households and smaller companies are to receive a basic quota of 80 percent of their current electricity consumption for a gross price of 40 cents per kilowatt hour. In this case, the relief is not quite as great as with gas; according to Check 24, the average price is currently 42.7 cents. From January, however, significantly higher prices have to be paid in many cases, the letters have just been sent. The electricity price brake should not only be financed from the WSF, but also partly from the electricity producers. “Accidental gains” on the electricity market are to be skimmed off retrospectively from September 1st until at least the end of June next year. This had aroused a lot of criticism in advance, because then the profits of green electricity producers should also be skimmed off.

What happens before the price brakes start?

There will already be a one-off payment in December. Gas and district heating customers are more or less exempt from the monthly down payment. Instead, the suppliers should receive the money from the state development bank KfW – and ultimately also from the Economic Stabilization Fund. 9 billion euros are planned for this. According to the Gas Commission’s original concept, the complete takeover of the deduction in December should also serve as a bridge for January and February. However, the government did not succeed in conveying this communicatively. Instead, the “winter gap” from the federal states and the social organizations prevailed. This year there have already been three relief packages totaling 95 billion euros, including heating subsidies for housing benefit recipients, the 300-euro energy price lump sum for employees and pensioners, higher child benefits and lower VAT on gas.

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