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    Austria caps electricity prices: measure estimated to save households 500 euros a year

    September 8, 2022 - CE Noticias Financieras


      The Austrian government on Wednesday approved a plan that limits the cost of electricity to 80 % of average household consumption, from which point onwards the full market price will be paid, in what is estimated to save each family 500 euros a year.

      The idea is that households will pay only 10 cents per kilowatt hour (kWh) for the first 2,900 kwh they use, a mark that is estimated to be 80% of last year's annual consumption of a three-person household.

      Thereafter, the market price will be paid, which currently ranges from 18 to 72 cents, according to E-Control, the industry watchdog.

      Agreement between conservatives and greens

      The subsidy encourages savings, since the less is consumed above that limit, the greater will be the part of the electricity cost that will be paid at that fixed price of 10 cents per kwh.

      The measure, approved today by the government formed by the conservative Popular Party and the ecologist Greens, will be felt in consumers' pockets as early as this December and will be in force until May 2024.

      The subsidy does not distinguish between the number of people living in a household or income, so smaller families or those who live alone, and therefore spend less electricity, will benefit the most.

      The Federal Chancellor, the conservative Karl Nehammer, indicated today, however, that households with fewer resources will receive an extra 200 euros, and that those with more than three members will be able to apply for other subsidies. The Executive estimates that this subsidy scheme will cost between 3 and 4 billion euros.

      Austria will begin in October to pay what it has called the inflation bonus, a one-off payment of 500 euros per adult and 250 per child, and has also announced a coupon of 150 euros that will be automatically deducted from the electricity bill at the end of the year in which deficits or surpluses are balanced between what is paid and what is consumed.

      From the opposition, the social democrats, ultranationalists and liberals have criticized with different arguments that the measure comes late. Trade unions and workers' organizations have reacted positively, although they are asking for more aid.


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