Electricity companies make billions in profits: very cheap on the stock market, but even more expensive at home!

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Bargain prices on the electricity exchange: Contracts for the next 12 months are traded there at 9.5 centimeters per kilowatt-hour. According to today’s report by “SonntagsZeitung”, this figure is 40 percent less than in the summer months.

“Electricity market prices for next year are currently lower than at any time since the beginning of the Ukrainian war,” Andreas Möckel, an expert at electricity market authority Elcom, told the press on Sunday.

Additional costs for private individuals

However, current low prices are of no benefit to Swiss households for now. In 2024, many people will pay more for electricity at home, not less.

On average it is almost 20 percent more. For example, residents of Zurich are being hit hard. Zurich Canton Electricity Company (EKZ) is increasing prices by 60 percent to 19 centimeters per kilowatt-hour.

Experts predict that a household of two in a 3-room apartment will have to pay additional costs of approximately 350 francs per year compared to 2022.

Problem: Private households are forced to buy their electricity from the local electricity supplier. They determined the binding tariffs for next year in August. The law requires this. At that time, many suppliers were still expecting higher electricity prices.

Local electricity companies are not allowed to make a profit on the electricity they sell to private households. High prices in EKZ are explained by the fact that electricity for the next year is supplied well in advance, between May 2021 and April 2023. During this period, prices in the market were high.

BKW and Axpo rejoice

Meanwhile, electricity companies such as BKW and Axpo are making billions in profits. The total production of Bern’s electricity suppliers increased by 46 percent compared to the previous year, reaching 5.20 billion francs in 2022. As a result, a profit of 574 million francs was made, after 327 million francs in 2021.

Axpo has hydroelectric power plants and its own nuclear power plants that produce cheap energy. The group did lucrative business with it when electricity prices were high.

Companies BKW and Axpo claim that they no longer make their profits at the expense of private households. According to Axpo spokesman Martin Stucki, these huge profits come largely from international customers. Swiss customers contributed only “marginally” to profits. The group does not offer any specific figures.

The fact that EKZ, together with the canton of Zurich, owns 37 percent of Axpo does not benefit households in terms of electricity tariffs.

EU is putting pressure

Moreover, cantonal governments have little incentive to improve the situation. The cantons of Zurich, Aargau, Schaffhausen, Zug and Glarus, which are co-owners of Axpo, each receive a share of the profits.

Improvement for households could now come from the EU. They are ready to make an electricity agreement with Switzerland only if the electricity market is opened in this country.

This means private households will be free to decide whether they want to buy electricity from their local supplier or from another provider. Energy Minister Albert Rösti (56) recently told Blick: “I said we don’t need it at any cost,” referring to the electricity agreement. (he)

Source :Blick