Austrian government agreed to curb electricity prices –


“No one in Austria should be able to meet their basic electricity needs. This is the most important goal of the electricity price curb that we adopted at today’s Council of Ministers With this we are implementing another aid measure against inflation,” Chancellor Karl Nehammer said after the Cabinet meeting.

The government showed unity today to present the new measures against inflation and how to try to fight the energy crisis in Austria. In the press foyer, together with Vice-Chancellor Werner Kogler, Energy Minister Leonore Gewessler and Finance Minister Magnus Brunner, he provided information on the implementation of a cost brake on the electricity in Austria, which should be effective from December this year until June 2024.

Negotiations between the Ministry of Energy and the Ministry of Finance have been successfully concluded. Accordingly, the government assumes that the aforementioned 80% of average Austrian household consumption should be set at around 2,900 kilowatt hours (kWh). Up to this level, only ten cents per kilowatt hour have to be charged – only for consumption above this level, the standard market price has to be paid. The ten cents per kilowatt hour refers to the price of labor or consumption.

“This model is designed to help people better cope with increases in the price of electricity. At the same time, the model is designed so that anything above 2,900 kilowatt hours is subject to the normal electricity tariff. It it’s about encouraging people to save, to continue to be careful not to consume too much electricity,” said the Chancellor.

The Chancellor thanked WIFO director Gabriel Felbermayr and his team for the “very intense and confident” exchange. According to Nehammer, together with the ministries of energy and finance, they had found a way “that is viable, that is also viable in budgetary terms, and that can above all be implemented quickly and without bureaucracy”. “Now in the stress phase, help has to get to people quickly,” Nehammer said.

Given the criticisms, Nehammer explained that “for us it was a matter of weighing things up” and that ultimately “helping fast” took priority, because “if you help fast, you help twice”. In addition, he said, differentiations had been made: “People in particularly difficult social situations who are exempt from the audiovisual license fee will benefit from additional support”. Furthermore, it is to give for households, in which more than 3 people live, on request the possibility of an additional promoted quota.

Nehammer also pointed to the relief measures already in place to help people deal with generalized inflation: “Since August, the relief measures have started to take effect, whether it’s the double child allowance or the anti- inflation and climate. Overall, we now have a plethora of measures to ensure that we do not leave the Austrian people alone in this tense phase.” The Chancellor concluded by thanking everyone who worked hard to implement the measures: “Together we have succeeded in taking an important step towards easing the burden of people”.

“In these times of inflationary trend, there are aberrant peaks which are generally harmful: socially, economically and for companies. On the one hand, there is direct aid, on the other hand, it is important to control the costs,” said the Vice-Chancellor. Werner Kogler underlined. It’s so important, he said, because people’s daily lives are about basic needs. For anything you need in the household, he said, you should have that preferred base rate, which is based on pre-crisis prices. “We basically did what was recommended in terms of base rates. The direct aids are a significant sum and are now starting to kick in. This is very important for those at the bottom of the income pyramid,” said said the vice president. -Chancellor, who pointed out the social differentiation in the system. The brake on the price of electricity intervenes quickly and on time due to the beginnings of price increases on the part of suppliers. “Electricity savings also help secure jobs in our export-oriented industry.”

In her statement, Energy Minister Leonore Gewessler argued that it was important for the federal government to take action to counter the massive wave of inflation and provide relief to the population. “The Electricity Cost Brake does exactly that. We have created a viable model that curbs rising costs in the electricity sector. It is a significant relief without the need for an app,” said explained Gewessler. He added that the aid acts directly on the electricity bill, meets basic electricity needs and reaches people very quickly. People who need additional support will receive an additional 75% reduction in network costs.

Since only basic needs are covered, the program also ensures that energy continues to be used with care, because: “Energy is a precious commodity and every contribution to saving energy helps”, says Gewessler. Especially when it comes to saving electricity, “the little things often make all the difference”, he said, whether it’s defrosting the fridge, using LED lights or not letting the washing machine run half empty. “Especially now we need to pull ourselves together,” said the energy minister, who thanked everyone involved for bringing about the decision.

“The times are extremely difficult. As a federal government, we have been struggling for six months with very complex problems for which there are no simple solutions,” said Finance Minister Magnus Brunner. The high costs would weigh on everyone in the country, inflation had meanwhile also reached the middle class.

However, many measures had been launched: “There is no population that we have not accompanied as a result by a relief stage, and the measures are coming. Next year, structural measures such as the valuation of social benefits would also come into effect. “Both in terms of speed and volume, we are at the forefront throughout Europe,” Brunner said confidently. However, as the price of electricity continues to rise, he said, the federal government must put a stop to it, adding that emphasis has also been placed on integrating a social ladder. “Overall, the costs amount to 3 to 4 billion euros,” said the Minister of Finance, adding that it also depends on the contractual situation and the evolution of market prices.

Only time will tell if the measures against inflation will help and what degree of resilience is needed.

Austrian Federal Chancellery


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