Cost of living: First Austrian state imposes cap on electricity prices

Hayley Maguire
Hayley Maguire - [email protected]
Cost of living: First Austrian state imposes cap on electricity prices
Lower Austria is the first federal state in Austria to introduce an electricity price cap for households. Photo by Tayssir Kadamany on Pexels.

Lower Austria has announced a price limit on electricity costs for residents in the federal state – the first of its kind in Austria amid the rising cost of living.


As of September, residents in Lower Austria will be able to apply for the Strompreisrabatt (electricity price discount) to receive a price cap 11 cents per kilowatt hour of power used.

The initiative, which was announced on Wednesday by Governor Johanna Mikl-Leitner (ÖVP), will cover 80 percent of an average household consumption and will cost €250 million, reports Kurier. The funding will run until 30th September 2023.

Mikl-Leitner said: "Our electricity price relief brings balanced support for all Lower Austrians and creates a clear incentive to save energy."

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The subsidy will be deducted directly from the energy bill from October and the calculation will be based on the number of people living in a household.  

According to ORF, this means a one-person household will save around €170 per year, for two people it will be €272 and for three it will rise to €374.

A four-person household will save approximately €415 and for five people in a house it will be €457. For each additional occupant, savings should then amount to €41 per person.

However, the funding will only apply to residents who have their main home in Lower Austria, and not to second home owners. The cut-off date for registering a Hauptwohnsitz (primary residence) in the state was July 1st.


The model has been developed in cooperation with local energy supply EVN, but a deal is also being negotiated with other electricity suppliers in Lower Austria, according to Kurier.

The Lower Austria federal government is also calling for transparency on the possible impacts on individual industries in the event of an “energy control emergency”, as reported by Der Standard.

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Could a national energy price cap be introduced in Austria?

During the press conference on Wednesday, Mikl-Leitner, who has been actively campaigning for financial support for energy consumers, said: "I wholeheartedly welcome an Austria-wide price cap." 

Inflation in Austria is currently running at 8.7 percent - the highest rate since 1975 - with increasing energy costs significantly contributing to the rising cost of living.

Gabriel Felbermayr, head of the Austrian Institute for Economics (WIFO), recently submitted a proposal to the Austrian Federal Government about capping energy prices for "normal consumption". Chancellor Karl Nehammer has since directed Finance Minister Magnus Brunner to review the proposal, according to reports.

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The concept of a price cap has sparked debate in the country with the ruling Austrian People's Party (ÖVP) reportedly against the concept. Both the Freedom Party of Austria (FPÖ) and the Social Democratic Party of Austria (SPÖ) have expressed support in subsidising energy prices.

With energy prices set to rise even higher and the prospect of Russia switching off the gas supply through the Nord Stream 1 pipeline, this issue is likely to remain a point of political debate for the foreseeable future in Austria.


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