State government presents proposal for energy price cap

Schwerin (dpa/mv) – The Ministry of Economic Affairs in Mecklenburg-Western Pomerania has specified the state government’s ideas for a nationwide energy price cap. “For private households, the energy price should be designed as a fixed price for an amount of 80 percent of the average consumption in the reference years 2019 and 2020,” said Economics Minister Reinhard Meyer (SPD) on Friday in Schwerin. The proposal includes gas and electricity as well as heat.

The planned fixed prices should be at the level that existed on the market in Ukraine before the war. According to the concept, the remaining consumption of a household must be billed at the current market price, which offers a reasonable incentive to save.

Meyer sees a cap until the end of the heating period in spring 2024 as necessary. He estimates the costs at 100 to 120 billion euros. The sticking point is the financing, according to the minister, the federal and state governments should check how much additional revenue the state is currently generating from electricity and mineral oil taxes, among other things. Asking companies to pay up and taking on additional debt, Meyer believes, are subordinate options for financing.

The state government wants to present the proposal at the upcoming Prime Ministers’ Conference (September 28). If the federal and state governments do not agree on this, Meyer also sees the option of an initiative in the Bundesrat. It is important to him that the price cap should take effect in December, this is psychologically important.

In principle, the state government is proposing a similar model for companies, social institutions and others. However, since the electricity consumption of many companies in 2020 was strongly influenced by the pandemic, the years 2018, 2019 and 2020 should be used here as a basis for comparison.

Meyer made it clear that he can also imagine more extensive state intervention in the energy market, for example directly with gas buyers. However, it is debatable whether this would be compatible with EU law.

© dpa-infocom, dpa:220923-99-874542/4

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