Stefanie G. is a loyal customer of the Munich public utility company (SWM). Despite all the advertisements and teasing calls, over the years she has never seriously considered switching to another electricity provider. The expected effort was too great for her compared to the promised savings.
Last weekend, she once again received mail from her municipal utility: “It is important to us to supply you with electricity reliably and at fair prices – especially in these difficult times,” were the introductory words. It’s off to a good start, thought the 43-year-old, who lives with her husband and child in a suburb of the Bavarian state capital, knowing full well that the hard end would surely come.
From January 1, it says on the back, instead of paying 23.23 cents per kilowatt hour (kWh) for M-Ökostrom, you should pay 59.02 cents/kWh. FOCUS online even received a letter from a reader who said he was supposed to shell out a whopping 84.57 cents/kWh at his “electricity discounter” after the turn of the year instead of 43.27 cents/kWh.
Electricity price brake should take effect from January 1st – really?
It’s a good thing that the federal government wants to follow France’s example and will apply the brake on electricity prices from January 1st. For Germany, this means that the price of electricity for private consumers and small and medium-sized companies will be capped at 40 cents/kWh. According to the federal government, this applies to the basic requirement of 80 percent of the previous year’s consumption. The relief is to be refinanced, at least in part, by skimming off so-called “accidental profits” from electricity producers.
“Pulling the electricity and gas price brakes forward to January 2023, as is now being discussed, cannot be implemented in such a short time,” Stadtwerke München told FOCUS online on request. So far, many details are still unknown, but they are indispensable for the implementation of the complex IT processes (SAP).
Energy expert: “Electricity price brake is highly complex”
Energy expert Mirko Schlossarczyk is not surprised: “The electricity price brake is highly complex as far as the calculation logic is concerned, and it entails an enormous administrative effort for the suppliers,” says Schlossarczyk, who works as a partner at “enervis energy advisors” in Berlin. “We know from many suppliers that this will not be feasible in the short term.”
Eon, for example, told FOCUS online: “In the interests of our customers, we welcome the relief announced by politicians through price brakes. Of course, we will implement these as soon as the legal framework is in place. The details of the implementation are not yet known, as the legislative process is still in its infancy.”
Rheinenergie in Cologne says: “We are working flat out to implement everything on schedule, if possible. However, all those involved are still missing the really concrete specifications/definitions, nothing has been decided yet.”
N-Ergie in Nuremberg: “We very much welcome the fact that the federal government is creating relief for the citizens – this is essential in view of the rising energy prices. As a regional energy supplier, we naturally want to pass on these savings as quickly as possible. However, the schedule pursued by the federal government for the various relief measures is very challenging for the entire industry – especially with regard to the timely implementation in the IT and billing systems. It is currently difficult to assess whether it will be possible to securely implement the electricity price brake from January 1, 2023. Due to the ongoing legislative process, important details are not yet available. The specific effort for energy suppliers therefore remains unclear.”
Is the electricity price brake a botch?
The federal cabinet actually wanted to approve the bills for the energy price brake this Friday in order to then feed them into the parliamentary process. But the date has now been postponed by ten days to November 28th. A request from FOCUS online to Robert Habeck’s Federal Ministry of Economics for specific planning, details and alternatives has so far remained unanswered.
Question to the experts: Is the electricity price brake a botch? “I wouldn’t call the electricity price brake a botch overall, but there is a great risk that it could become a botch,” answers Mirko Schlossarczyk. One reason is the extremely ambitious schedule, another is the complexity, especially in connection with the legal pitfalls in the planned skimming off of excess profits.
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Schlossarczyk warns: “Under no circumstances should there be a rush job with technical errors such as with the gas surcharge.” He also considers the “probability that the electricity price brake can be implemented in its current form on January 1st and have an effect” to be very low . “The great danger is that energy companies will not invest, especially in renewables, when this levy regulation comes into effect.” Many projects would then no longer be economically viable.
Association proposes further payment of the energy money
The Federal Association of Energy and Water Management (BDEW) also declines. January 1st is impossible. “In order to relieve the budget in the short term, the federal government should choose simple, pragmatic solutions,” suggests BDEW Managing Director Kerstin Andreae. Such a solution could be another energy money payment in January. This tool has already been tested. “Another option is for the federal government to make an electricity down payment in the same way as the December gas deduction.”
For consumers, in addition to the question of when the brakes actually apply, how the electricity price develops in general is no less important. At the beginning of the week, traders and electricity suppliers were able to stock up on the German spot market at comparatively moderate prices of 177 euros per megawatt hour – that is 17.7 cents/kWh.
Energy expert Schlossarczyk is convinced that end consumer prices for electricity will remain at a high level for the time being. “In the medium term we have to adjust to the current level, i.e. continuously over 40 ct/kWh.” This is mainly due to the fact that wholesale prices only make up around 45 percent of the actual electricity price. “The larger part are fees, taxes, levies and levies.”
To be on the safe side, Stefanie G. from near Munich follows the recommendation of her electricity supplier. The SWM advise: “Increase your advance payments to avoid an additional payment on your next annual bill.”