Planned tax relief: windfall gains from gas and electricity price brakes?

Status: 01.12.2022 07:49 a.m

The electricity and gas price brake planned for January is a topic in the Bundestag for the first time today. Many utilities have announced drastic price increases. Consumer advocates fear that these will be higher than necessary.

By Hans-Joachim Vieweger, ARD Capital Studio

There is hardly an electricity customer who has not received a price increase in the past few weeks. At MVV Energie in Mannheim, just under EUR 0.45 will be due for the basic supply from January instead of the previous EUR 0.27 per kilowatt hour. With the Saxon energy supplier Envia it is 0.48 euros instead of the previous 0.28 euros. At RheinEnergie in Cologne, the price climbs to 0.55 euros, and at the Stadtwerke München even to just under 0.62 euros.

Steffen Arta can only shake his head. The managing director of the Stadtwerke in Dreieich in Hesse cannot explain such large differences. “Of course, every company pursues its own procurement strategy. But this extreme spread in prices that we are currently seeing can no longer be justified in terms of the energy industry.”

Deadweight effects are possible

All increases will take effect on the date on which the gas and electricity price brake is to come. The state will then assume the costs for 80 percent of the previous consumption, which are more than 0.12 euros for gas and more than 0.40 euros for electricity. According to Arta, the suppliers no longer need to calculate the energy prices as best as possible in line with their actual mandate. “I think deadweight effects cannot be completely ruled out.”

Possibilities of control by the cartel office?

In other words, a few cents could be added. Yes, the state pays. A danger that is also seen in principle in the traffic light coalition. “Of course, this is a very relevant point that you have to pay attention to,” says Green politician Ingrid Nestle. Exactly for this reason, together with the introduction of the price brakes, the possibilities of control by the Cartel Office should be strengthened.

“It stipulates that companies can only raise prices to the extent that they can actually support it with market data. And when there is a doubt, companies have to prove that they did it. That is, I would say, an unusual one strong paragraph at this point.”

An important point, says CDU Vice President Andreas Jung. But with the current traffic light plans, he has doubts that unjustified price increases will actually be penalized. “Anyone who overdoes this must also fear consequences. That is what the legal regulation that is now being introduced for the next year is about. That’s why we think it’s necessary to take a close look at it again.”

“Competition will continue”

Of course, every customer can also do something against excessive price increases and switch providers, says Andreas Mehltretter from the SPD. After all, the price cap only applies to 80 percent of previous consumption. For the rest, it does make a difference whether “I have a tariff with a supplier who has made reasonable provisions for such a situation, which is then perhaps just over 0.40 euros, and a tariff that is up to 0.80 euros. That’s going to make a concrete difference in the wallet for consumers and consumers. And that’s why the competition will continue to work like this.”

But that alone is not enough for the FDP energy politician Michael Kruse. Customers who – as everyone wants – save a lot on gas or electricity have little incentive to switch providers. “That’s why we are currently discussing intensively about instruments that offer such an incentive for those who save a lot and of course also to keep the competitive pressure on companies as high as possible to continue to focus on low prices.”

The problem of free-rider effects has thus been recognised. Corrections to the gas and electricity price brakes are still possible during the deliberations in the Bundestag today.

Free rider effects with electricity and gas price brakes?

Hans-Joachim Vieweger, ARD Berlin, December 1, 2022 6:31 a.m

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