Relief: Cabinet decides on gas and electricity price brakes

Status: 11/25/2022 5:39 p.m

The next hurdle in the gas and electricity price brake has been cleared: the cabinet has decided on the two measures. If the Bundestag and Bundesrat agree in December, they can come into force as planned in 2023.

The federal cabinet has paved the way for the planned gas and electricity price brakes. As Chancellor Olaf Scholz and the Federal Ministry of Economics announced, the two draft laws to relieve energy customers have now cleared the next hurdle.

The Bundestag and Bundesrat should then finally decide on the measures in December. Consumers and the economy should thus benefit from capped prices for gas and electricity from next year.

Response to high energy prices

The federal government is reacting to the sharp rise in energy prices with price brakes worth billions. The measures are intended to cushion the burden on households and companies. It is planned that electricity, gas and heating prices will be limited for a proportion of consumption. As a first step, the Bundestag and Bundesrat had already decided on a December one-off payment that should benefit district heating and gas customers.

With the gas price brake, households and small and medium-sized companies are to receive a guaranteed gross gas price of 12 cents per kilowatt hour for 80 percent of their previous consumption. For heat customers, the price should be 9.5 percent up to the 80 percent limit. The contract price should apply to the remaining 20 percent of consumption.

To reduce the electricity price, households and small companies are to receive 80 percent of their current consumption at a guaranteed gross price of 40 cents per kilowatt hour.

Limited until April 2024

The brakes, which were limited to April 2024, were originally intended to take effect from March of the coming year. Citizens and companies are now to be relieved retrospectively for January and February. In March, the relief amounts for the two previous months are to be taken into account.

The relief from the electricity price brake is to be financed in part by skimming off so-called random profits that companies make on the electricity market. This affects producers of green electricity from wind and sun, for example, who have recently benefited from high prices on the stock exchange. The skimming takes place from December 1st – retrospective application from September was originally planned. According to the draft law, this should be the end of April 30, 2024 at the latest. The ministry announced that the period had been shortened compared to the original considerations.

More protection against power locks

In the future, consumers should also be better protected against gas and electricity providers cutting off their energy supply in the event of payment problems. The regulation is part of the new price brake laws. According to this, energy providers should be obliged to offer customers to pay their arrears in installments before imposing lockdowns. In a so-called waiver agreement, this installment payment should then be recorded as binding. These special agreements to protect against blocks should also be possible by the end of April 2024 for those customers who are not in the basic service but have other contracts.

In the future, customers should also be able to justify more easily why an energy cut would be unreasonable for them. “I want nobody to be without gas and electricity this winter because they can’t cope with the increased energy prices,” said Consumer Protection Minister Steffi Lemke (Greens) of the dpa news agency.

Electricity and gas price brakes are through the cabinet

Kai Küstner, ARD Berlin, 25.11.2022 5:40 p.m

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