Wallner critical with increased profit skimming

On Thursday, Vice-Chancellor Werner Kogler (Greens) defended the government’s anti-inflation measures, which he had criticized as having too little effect and taking effect too late. The federal government has taken a number of consecutive measures. Kogler was convinced that the effects would soon be seen and at the same time warned that one should not expect “prices to be capped overnight”. “You have to be careful,” said the Vice Chancellor during a visit to Vorarlberg.

The aim is also to maintain the comparatively high purchasing power of Austrians. Important investments have already been made here, for example with tax cuts, the abolition of cold progression and anti-inflation compensation. “We’ve also been criticized for doing too much,” said Kogler. Further increases in food and energy costs will not be accepted. “We’re not watching anymore,” he said. By siphoning off excess profits from the energy companies – “the numbers bear that out” – more should quickly reach the people. The law on skimming off profits will come into force as early as June, “it can’t get any faster,” says Kogler. Effects should then become visible, and he hoped that the announcement of the measure would already cause prices to fall. In the food sector, too, “we are now driving in everywhere”. They are relying on more transparency and an increase in competition control.

Vorarlberg’s governor Markus Wallner (ÖVP) wants to “take a very close look” at the announced tightening of the Energy Crisis Contribution Act as the owner’s representative of the state’s own energy supplier illwerke vkw. The company has only made a cautious estimate that is in the high single-digit millions. In any case, balancing and pumped storage energy must be excluded, he emphasized, which is necessary for the success of the energy transition. In the case of interventions, he sees the risk of a dampening of investments, in the worst case the measure reduces the company’s ability to invest and has no effect.

The key point is the capping of revenues for electricity producers to 120 euros per megawatt hour. If electricity is sold more expensively by the producers, then the state skims off any additional amounts, explained Jakob Schwarz, spokesman for the Greens for budget and taxes, in an interview with the APA. The measure is not aimed at profit but at sales.

This skimming threshold should apply to everyone from June 1, regardless of any price reductions. However, companies that charge less than 120 euros save themselves the levy on the state. A whole new law is not necessary for this. According to Schwarz, only the threshold value in the law on energy crisis contribution electricity (EKB-S), which has been in force since December 1, 2022, needs to be adjusted. So far, revenues of over 140 euros per MWh have been skimmed off.

The levy applies to electricity generated in Austria from all sources with the exception of biomethane and natural gas or from pumped storage power plants. Such a levy on natural gas makes no sense because it has a price-setting effect in the EU system, according to Schwarz, who helped negotiate the anti-inflation package on the side of the Greens. Power plants can claim a higher amount if they can prove that their production costs are over 120 euros/MWh. Then they are granted a proceeds that corresponds to the production costs plus a margin of 20 percent.

The revenue skimming is billed semi-annually. In the current law, the measure is limited until December 31, 2023. The Ministry of Finance had originally assumed that EUR 2 billion could be skimmed off as part of the temporary measure. In view of falling prices, however, this amount is likely to be too high.

At the same time, the law also takes into account the fact that companies have to make huge investments in switching to renewable energy sources. Therefore, investments in the expansion of renewable energy, the grid and energy efficiency can be counted halfway if they become cost-effective in 2023. This means that the levy amount would be “pushed up” to up to 160 euros per MWh. This means that if a company’s investments correspond to EUR 80 per megawatt hour sold, for example, revenues are only skimmed off from a sales value of EUR 160 instead of EUR 120. However, all proceeds above 160 euros per megawatt hour must be transferred to the Republic of Austria, even if more is invested. Schwarz estimates that companies like Verbund will probably invest enough to reach the skimming threshold of 160 euros/MWh.