The energy price brake has been in effect since this Wednesday. But does it also reach consumers? Or maybe different than expected? As reported by the Federal Statistical Office, some suppliers have adjusted the “working prices”, which were previously below the price brake. So were prices increased because consumers don’t even have to pay that part of the price that is above the set limits themselves, but is instead borne by the state?
The price brake for gas, district heating and electricity only “partially (…) dampened the price development in January 2023”, there were even price increases, writes the Federal Statistical Office in a statement on the effects of the relief packages.
Relaxation on the energy markets
The fact is: since the beginning of the year, wholesale prices, i.e. the purchase prices of energy suppliers, have been below the level they were before Russia’s war of aggression in Ukraine for the first time. Natural gas prices were already elevated at the beginning of the war.
The cheapest natural gas and electricity tariffs in February are again in a similar range as a year ago – and thus below the threshold values from which the price brakes take effect, according to evaluations by the price comparison portal Verivox. It evaluated the tariffs of energy suppliers with at least twelve months price maintenance. However, many customers are tied to older contracts or have not been able to switch to cheaper tariffs.
The price brakes take effect from 12 cents per kilowatt hour for natural gas and from 40 cents for electricity for 80 percent of the previous year’s consumption. If the suppliers demand more, the state compensates for the difference. The evaluated prices include a percentage of the consumption-independent base price, which is hardly significant per kilowatt hour.
Basic suppliers raise prices
Verivox has also provided the SZ with data on the offers of the basic suppliers, i.e. those tariffs that municipal and regional electricity suppliers have to offer all consumers. These tariffs also became more expensive last year, the biggest jump in prices – for both gas and electricity – occurred from December to January, i.e. at the same time as the price brakes were introduced.
According to the Federal Network Agency, one in four households gets electricity from the basic supply, whose tariffs were cheaper than those of private providers for a long time during the crisis. Why it is like that? The basic suppliers do not grant a price guarantee. However, they often plan their procurement further in advance and have long-term contracts with suppliers that protect them from short-term price fluctuations. Private providers, on the other hand, often buy at short notice and were thus able to achieve lower prices before the energy crisis.
“In addition, it was not always possible for consumers to switch to the basic supply tariff during the energy crisis,” said a Verivox spokesman. Some basic suppliers had created more expensive tariffs for new customers and made it difficult to switch to the basic service with lower prices. After a change in the law in the summer, however, this distinction was no longer possible.
Customers who want a twelve-month price guarantee paid at least 35 cents in September, but the cheapest price is now just under 12 cents. After the price increases in January, the basic suppliers are now close to the price average of the tariffs available on the market, according to data from the Bund der Deutschen Energiewirtschaft.
For electricity, the average basic supply price was below the 40 cent mark throughout the energy crisis and well into December. In January, Verivox reported an average price of 46 cents, which continued to rise in February. At the same time, the cheapest non-basic supply tariffs with fixed prices for 12 months fell under the electricity price brake for the first time since last July.
Bundeskartellamt sets up department to combat abuse
When asked, the press spokesman for the Bundeskartellamt stated that there were no concrete indications that default suppliers in particular were abusively claiming state subsidies in connection with the energy price brakes. At the beginning of the year, however, a dedicated department was set up to combat abuse of the energy price brakes.
In order to receive payments to compensate for the price brakes, suppliers must provide the Federal Cartel Office with information on prices and quantities. If proceedings are initiated, the suppliers must prove that the price increase is justified by increased purchasing costs. To date, no such procedure has been completed.