Amendment for energy price brakes passes cabinet

04/06/2023

Source: Energy & Management Powernews

The German cabinet has approved a draft amendment to the natural gas, heat and electricity price brake laws. This is intended to make implementation easier.

With the draft law, regulations in the Natural Gas Heat Price Brake Act (EWPBG) and the Electricity Price Brake Act (StromPBG) are to be clarified, minor regulatory gaps closed and effective enforcement of the energy price brakes ensured. The amendment was passed on April 5 in the Federal Cabinet and must now still pass the Bundestag.

Mainly it concerns editorial and technical adjustments, explained the Federal Ministry of Economics (BMWK). The need for change resulted from first practical experiences as well as inquiries and remarks of federations, enterprises as well as citizens. The results of discussions held by the BMWK with energy suppliers, companies and associations were therefore also incorporated into the amendment. There are also implementation aids for energy suppliers (see link below).

Associations dissatisfied with the amendment

In a reaction to the decision, Kerstin Andreae, chief executive of the BDEW association, said it was right to also relieve heating electricity customers. "It is not right that this should take over the energy suppliers," she criticized at the same time. The fundamental problem remains even with the amendment: The government has still not created an instrument to provide income-based relief for households in Germany during crises. But that would be a contribution to crisis resilience, because prices are rising in all areas of life, Andreae warned.

For the Association of Municipal Enterprises (VKU), Chief Executive Ingbert Liebing said the pragmatic solutions for companies affected by the pandemic or the flood disaster were good. In contrast, the new correction procedures for heating power lead to an unjustifiable effort that is disproportionate to the result. "Therefore, I appeal to the Bundestag to (...) adopt simpler solutions (...)," Liebing explained. For example, lump-sum one-time payments are possible. Also, there is in the amendment in many constellations the risk that revenues are skimmed too much, Liebing criticized.

Important changes

Night storage heating/ heat pumps: The uniform reference price of 40 cents/kWh leads to a social injustice for private households that use an electrically powered heating, because they are sometimes not relieved by the price brake at all or only very slightly. This is because heating electricity can generally be purchased at significantly lower prices than household electricity. Nevertheless, prices have also risen sharply in this area. For this reason, the reference price for heating electricity as well as for low tariffs (night electricity tariffs) is to be reduced from 40 to 28 cents/kWh for grid connections that consume less than 30,000 kWh per year.

Clarifications in the Bonuses and Dividends Ban: In the bonuses and dividends ban for companies that receive relief under the price brakes, among other things, the legal consequence of a violation is clarified. In the event of a violation, overpaid relief is to be reclaimed by the "audit authority". Bonus and dividend payments will not automatically become invalid, but they must be repaid by the bonus recipient. In addition, the temporal scope is clarified to apply only to bonuses in 2023. Bonuses and dividends for the year 2023 for companies with a discharge of more than 50 million euros, however, may not be granted.

The "audit authority" has not yet been named, BMWK and Ministry of Finance award the task in case of doubt for lack of official capacity but also to a private company, such as a large auditing firm.

Adjustment of the relief amount: Introduced an additional relief regulation for companies that have consumed at least 50 percent less energy in 2021, the reference year for the price brakes, because of Corona measures or the flood disasters at the time. This may lead to hardship cases in the relief quota. For such cases of hardship, a correction mechanism is introduced.

Design of the "Claw-back Mechanism": It is specified how too much relief granted under the energy price brakes is to be reclaimed. The claw-back mechanism is expanded to include the possibility of a subrogation from the energy supply companies (EVU) to the "audit authority" and the audit authority is authorized to determine the maximum limits under state aid law without an application.

Parallel to the work on the adjustment amendment, the BMWK has opened a telephone hotline at 0800-78 88 900 to answer questions quickly.

The draft law on the adjustment of the energy price brakes is available on the Internet.

Implementation aids for energy suppliers and end consumers are available on the Internet.

Author: Susanne Harmsen