Despite enormously higher energy costs, the Federal Council sees no reason to intervene in the energy market. Last week, he discussed 13 support measures for households and businesses – and rejected them all. “Different variants of a return of companies from the free electricity market to the basic supply were discussed,” the cabinet said in a dry statement. Without going into further detail.
A basic paper from the Economic Department of SVP Federal Councilor Guy Parmelin (63) now shows which measures are involved, which was reviewed on the basis of the Public Information Act.
No ear for energy surcharge
A total of five measures were primarily aimed at relieving private households. Three of them analyzed different forms of energy supplementation for people with a low income, who have to pay a particularly high price because of the additional costs.
For example, through an additional premium discount for health insurance. A 30 percent increase in the federal contribution would cost CHF 913 million. For the cantons, implementation in 2023 is “possible only with great effort” and a one-year surcharge is “politically difficult to communicate and enforce,” the paper says.
The variant of charging the energy surcharge via the health insurer via premium or cost sharing was also canceled. Too much effort to define eligible households. The risk that cantonal differences lead to injustice is too great.
The implementation via direct federal taxes was also examined. Those who do not exceed a certain income must receive a benefit. The goal of offloading low-income households can be “achieved with a very high degree of precision”. The problem: Because it requires a legal basis, a payment wouldn’t be possible until 2024 at the earliest.
No compensation for pro-work
As a further measure, a reduction in the ancillary costs for those who receive an allowance has also been discussed. Only an individual check of the billing of the additional rental costs for the approximately 278,000 affected persons would be too time-consuming. And finally, it was also assessed as “unnecessary”, as the Federal Council is already raising general housing requirements and maximum rents by 2023. “If inflation continues to rise next winter, the introduction of a lump sum in the form of a energy compensation for people receiving EL are justified and should therefore be investigated,” the paper states.
The Federal Council did not listen to the idea of increasing subsidies for so-called pro works such as Pro Senectute, Pro Infirmis or Pro Juventute. These help needy seniors or the disabled with one-time services. That would be intended for AHV and IV retirees. The catch: “People who are not elderly, widowed, orphaned or disabled would be ignored.” In addition, the Pro-Werke were not established to support broad sections of the population, but to provide targeted help with social problems.
Nothing with “return percentage”
The Federal Council also had eight emergency measures for companies on the table. The government was most interested in returning free electricity customers to basic services, which the industry association is demanding.
At the moment, about 34,000 companies obtain their electricity on the free market. As the basic newspaper shows, only those who cannot bear the high costs otherwise should be able to return to basic care. Returnees must remain in basic care for seven years. To ensure that existing customers don’t pay for the bill, the model provided for two rates: the base rate and a higher “return rate”. The latter would have been established on the basis of the average of the expected market prices, ie the wholesale prices.
But the funding issue would become a hurdle. In addition, relatively few companies are currently affected and can also use bank loans to help themselves. The Federal Council brushed off the proposal.
Against electricity price ceiling
The government also wanted nothing to do with an electricity price cap in favor of electricity-intensive companies. The implementation would be very complicated – just the “reasonable price” issue for the purchase of electricity on the wholesale market. There is also a risk that the costs will be passed on to the general public.
Moreover, a price cap is not compatible with the competition. However, the paper leaves a back door open: if such price caps are introduced abroad and certain sectors of the economy in Switzerland are threatened, the Federal Council can take measures based on the federal constitution to protect the domestic economy.
Network allowance must remain
The idea of temporarily lowering the current network surcharge of 2.3 cents per kilowatt hour was also rejected. This could only happen in 2024. However, this mainly means a lack of resources intended, among other things, for expanding the production of renewable electricity. With each cut of 0.1 cents, 60 million Swiss francs went overboard. That would run counter to Parliament’s latest efforts.
Companies are also not helped because the reception is negligible. “If the bill of apparently 50 Rp./kWh causes a problem for the company, it will still have a problem with 50-2.3 = 47.7 Rp./kWh,” it says succinctly.
A reduction in the imputed interest for grid-retained power, which would have resulted in lower grid usage fees, was also rejected. A normal household would have saved just over 15 francs with a 1 percent discount. The idea of an electricity price adjustment during the year was also rejected as not very targeted.
The proposal to reimburse high electricity prices to electricity-intensive companies via the grid surcharge fund or a new electricity profit tax also fell through – as this would also correspond to an electricity price cap.
No Federal Energy Aid Loans
Providing energy solidarity guarantee loans – similar to the Corona aid loans during the pandemic – was also considered an aid measure. However, the newspaper concludes that the situation, if only in quantity, cannot be compared with the Corona crisis.
This time, the companies also have enough time to talk to their bank. “While the lockdown suddenly hit companies in the spring of 2020, the price level on the power exchanges has been at a high level for months.”
Should the federal government decide for such a program, it would “probably have to bear a higher risk of loss than in the ordinary guarantee program to take effect”. In the worst case, the experts estimate the maximum financial need for all companies at “almost 41 billion francs”. For those whose electricity contract expires at the end of the year, that would be about 8.5 billion francs at most. The Federal Council also did not accept the idea.
Special tax falls through
Finally, the idea of too high a profit tax in the electricity sector, for which SP Energy Minister Simonetta Sommaruga (62) had publicly expressed sympathy, found too little support from the state government.
This is despite the fact that the revenues could have been redistributed to end users or invested in the promotion of renewable energy sources. “The introduction of an excess profits tax could raise doubts about the quality of the location among potential investors and affect investment in other sectors outside the electricity sector,” the paper warned.
Conclusion: no action needed
In the end, the Federal Council wiped out all 13 aid measures. Because all measures “would be linked to major interventions, possible implementation problems and undesirable side effects”, the cabinet writes in a statement about its decision. Neither the economic situation nor inflation would justify intervention in the coming winter.
Preliminary conclusion of the Federal Council: no action needed.