How should the state support citizens with rising energy costs? Experts had already formulated initial ideas for a gas price brake. Now they’ve followed up.
In addition to a one-off payment in December and a gas price brake from March, the Federal Government’s Expert Commission for Gas and Heat also recommends temporary protection against dismissal for tenants who are heavily burdened. “Tenant households must be given at least six months to settle their energy debts,” says the 34-page paper that the chairmen of the commission handed over to the federal government in Berlin on Monday. The experts also make new suggestions for energy-saving campaigns and advice and to support industry. However, it is unclear what the federal government will do about it.
The expert commission includes experts from associations, trade unions, science and the Bundestag. In its interim report published a few weeks ago, the Commission had already recommended a one-off payment for gas and district heating customers in December and a gas price brake from March.
The experts are now also proposing: So that landlords are not left with the costs if tenants default on payments for their energy consumption, they should receive an interest-free so-called liquidity aid. The money is to come from an emergency aid fund planned for the period from January 1, 2023 to April 30, 2024. Its funds are also intended to support households with lower and middle incomes that cannot bear the growing costs themselves. Income and the amount of energy costs should be relevant here. There should be a separate aid fund for social institutions such as hospitals or nursing homes.
The Commission proposes that private households and small companies receive a one-off payment in December – based on the down payment from September 2022. This should be a kind of financial bridge. Anyone who earns more than 75,000 euros a year should have to pay tax on the help. The Ministry of Economics has presented a draft law that is to be passed in the cabinet this week and differs minimally from it: the state should basically take over the December down payment. There is a formula for this: The relief should correspond to the product of one twelfth of annual consumption and the price agreed for December 2022. This is to ensure that the sometimes significant price increases at the end of the year are taken into account.
There is still no draft from the federal government, only the proposal by the Gas Price Brake Commission with two stages: From January 1st, the gas price could already be reduced for large industrial companies, which should affect around 25,000 companies in Germany. In a second step, private households and small companies should benefit from lower prices starting in the spring.
According to the Commission’s ideas, the gas procurement price for large companies could be limited to seven cents per kilowatt hour for the first 70 percent of consumption. However, the companies would have to register their participation in the program with their suppliers and make it public. They should also guarantee that the site will be maintained in the long term. Private individuals could get a basic quota of gas for 12 cents per kilowatt hour – if they use more, it would be more expensive.
For many, March 1st, as proposed by the Commission, is too late; they are demanding discharge from January 1st. This question is still being discussed between the Chancellery, the Ministry of Economics and the Ministry of Finance, according to the federal government. DGB boss Yasmin Fahimi and also the Federal Association of Energy and Water Industries do not consider this necessary: the one-time payment has “the same or at least a similar effect” as the planned later gas price brake, both argue for the months of December, January and February. It is necessary because the suppliers could not implement the price brake faster.
Finance Minister Christian Lindner (FDP), on the other hand, suggested examining additional retrospective relief. Politicians and suppliers would therefore have until March to get the price brake off the ground, but then consumers would get money back for January and February. The question of whether the gas price brake will also be extended to heating systems using oil or wood pellets has not yet been decided.
The President of the Central Association of German Crafts, Hans Peter Wollseifer, fears that the December one-off payment will not be enough to carry energy-intensive crafts businesses into March. A “hardship bridge” is needed.
The Commission also wants consumers to be even more encouraged to save energy – among other things, with an expansion of the current campaign by the federal government. In addition, consumers should be informed better and more frequently about their own gas consumption and consumption throughout Germany. Anyone who exceeds their savings target of 20 percent should get a savings bonus, especially households with low incomes whose heating costs are covered by the state.
