Austria will cap power prices for households up to 80% of last year’s average consumption in a measure aimed at taming surging energy costs.
(Bloomberg) — Austria will cap power prices for households up to 80% of last year’s average consumption in a measure aimed at taming surging energy costs.
The step will generate annual savings for each household of an average 500 euros ($498) and may be formally announced at a government meeting on Wednesday, Der Standard newspaper said Sunday, citing people at the Finance and Energy Ministries it didn’t name. Austria’s government has set aside 2.5 billion euros to support the plan, according to the report.
The cabinet in Vienna is targeting power prices that have surged in a European market determined by natural-gas costs, even though Austria produces about two-thirds of its power with decades-old hydroelectric plants. The initiative comes as the European Union works on plans to change regulations for power markets that have become highly volatile in the wake of Russia’s war on Ukraine.
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Austrian households will have to pay market prices for any consumption above 80% of the average. That’s intended to create an incentive to reduce use, according to the government, which is is also working on measures to help businesses.