How could Austria's new electricity price brake benefit you?
Austria has confirmed a new electricity price limit to try and contain rising costs in the country. Here's what you should know about it.
Austria's federal government confirmed on Wednesday that the "electricity price brake" regulation was approved by the Council of Ministers.
The price cap for electricity will last until June 30th 2024, benefiting every household in Austria. The relief should be in place by December 1st, Chancellor Karl Nehammer (ÖVP) told the media.
"With the electricity cost brake, we are launching another measure to relieve the burden on people in our country quickly and directly. Households should be able to afford a basic need such as electricity", Nehammer said.
How much will I pay for electricity?
The price of electricity will be subsidised up to a consumption of 2,900-kilowatt hours, the government said. Until that limit, it will cost only ten cents per kilowatt hour - the energy price from before the current energy crisis.
Above that consumption limit, people will have to pay market prices for what they consume.
This way, the government hopes to help cushion rising costs but still incentivise people to decrease their consumption.
How high will the savings be?
The Austrian government estimates that the measure will help Austrian homes save from €400 to €800 on energy bills a year. The Finance Ministry added that the average household's savings would be €500.
Will it be the same for everyone?
Yes and no. The price cap will work the same for everyone, yes, but lower-income households, as well as those with more than three persons, will be able to apply for further assistance.
Those who are exempt from the broadcasting fees (GIS), meaning they are lower-income, will receive an additional subsidy of up to €200. Additionally, households with more than three persons can apply for further relief, Nehammer said, without giving further details.
Vice-Chancellor Werner Kogler (Greens) told the press during the event that the subsidies were intended to secure people's basic electricity needs.
How much is this costing the government?
The subsidy will cost public coffers. Finance Minister Magnus Brunner (ÖVP) said the costs would amount to €3 billion to €4 billion.
Measures to cushion high inflation
Austria is seeing high inflation rates, with prices soaring to a 50-year high.
In particular, high energy prices bring more uncertainty to residents of the alpine country.
The federal government has taken some measures announced as part of relief packages with one-off payments and changes in the tax system.
One of the main payouts is the “anti-inflation” payment to be paid together with a “climate bonus” sum to all adults in Austria, totalling €500 already this month.
Still, as consumer prices are expected to continue rising in the coming months, the government stated it is “already working intensively on the possibility of further mitigating measures”.