Electricity and gas price hikes banned: Federal government takes action
Many people in Germany have received unpleasant mail from their energy supplier these days. The prices for electricity and gas have risen to unprecedented heights and in some cases have doubled. Is that due to the higher prices on the stock exchanges or do the energy suppliers want to cash in at government expense? Now the federal government intervenes and could declare all electricity and gas price increases to be unjustified.
Federal Cartel Office to investigate electricity price explosion
Update from December 03, 2022: Contrary to what was previously reported, the draft law on the electricity and gas price brake is intended to prohibit a price increase without good reason in 2023. This is to prevent “misuse of use”. All price increases must meet certain conditions in order to be valid. This should be proven in advance by the electricity providers. Otherwise, the electricity and gas price increases are inadmissible. (Source: daily News)
Original item:
Shortly before the introduction of the electricity price brake, which in Germany will cap 80 percent of the previous year’s consumption at 40 cents per kWh from January 1, 2023, electricity prices have literally exploded. Extremely many electricity suppliers in Germany have massively increased electricity prices right now. Sometimes even more than doubled. While many people sometimes still pay less than 30 cents per kWh, the price will end up well over 40 cents by the turn of the year at the latest. As a reason, the higher procurement costs specified. These have halved compared to the summer. Nonetheless, prices are rising. Windfall effects of the companies are suspected, so that the Federal Cartel Office should now intervene (source: MDR).
In the draft law on the electricity price brake, it can be read that the “Bundeskartellamt should monitor the pricing of electricity providers”. The pricing should be checked carefully. It should be determined whether the prices have been increased unjustifiably. The bill also reverses the burden of proof. According to this, “the electricity providers should have to prove in the future whether a price increase was justified.” Then there is an obligation to bring the electricity. Penalties of up to one million euros are threatened if something is proven.
According to the MDR, more than 580 electricity providers have already increased their prices and there are no plans to review them before the new law comes into force. The now increased prices would no longer be checked and the Customers are at their mercy. In addition, not even the Federal Cartel Office itself believes that control with the current team is possible.
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High electricity prices remain
So what is left to say in conclusion? Electricity prices are rising and will probably remain so for a long time. If you still have an electricity supplier with a price guarantee that charges less than 40 cents, you can consider yourself lucky. Everyone else will have to pay more for better or worse. Will prices ever fall below 40 cents per kWh again? Only time can tell. In the end I can only recommend that you save electricity.
