Energy companies must open books

The federal government wants to keep an eye on the energy companies. Because what happened a year ago should not be repeated. Shortly before Christmas, the electricity company Alpiq knocked on the door of the federal government. Money is needed immediately, as the “Tages-Anzeiger” announced at the time.

Alpiq would have liked 1.4 billion Swiss francs from the federal government. But the company, which is largely owned by the public sector, didn’t want to be looked at on the books. The outgoing energy minister Simonetta Sommaruga (62) did not let that happen.

transparency problem

The energy task force deployed by Sommaruga quickly identified a transparency problem with the energy suppliers. While Swiss energy suppliers trading electricity in the EU area are subject to local disclosure rules, there is no legal basis in this country to access the companies’ books.

That should now change. Shortly before her resignation from the Federal Council, Sommaruga introduced stricter rules. As she explains to the media this Friday, the electricity regulator Elcom should be able to keep an eye on the electricity and gas companies – and to knock on the door in case of violation. Therefore, insider trading in energy should also be penalized. The Federal Council has opened consultation on the law.

rescue parachute

In June, the federal government also set up a protection shield of 10 billion for the system-critical energy companies – in addition to Alpiq, these are Axpo and BKW. After electricity and gas became scarcer and energy prices soared – not least as a result of the war in Ukraine – Switzerland, like other European countries, felt compelled to set aside money in case an energy company went bankrupt and it suddenly set off a chain reaction in European energy companies.

Axpo even ran into a liquidity bottleneck. The company secured four billion francs in case the money ran out on the financial market. The situation for Axpo has now returned to normal. To date, Axpo has not needed the loan.

Follow rules

However, the rescue package law is limited to the end of 2026. After that, the Environment and Energy Agency (UVEK) wants to replace it with other rules. With the new Transparency Act and improved supervision, the trade in electricity and gas must be safeguarded. And because the energy companies are accountable to Elcom, Elcom must be able to recognize at an early stage when a company is in danger of getting into financial difficulties.

In addition, the energy companies want to set requirements for equity and the required liquidity. The whole thing is reminiscent of the tightened rules for banks that were introduced after the experience of the financial crisis, when the federal government had to bail out UBS with billions.

In that respect, Elcom is now something like the financial market regulator Finma – and no longer just a toothless tiger. At least not if not all teeth are removed from the template. The consultations will run until the end of March 2023. Then Simonetta Sommaruga will no longer be Minister of Energy, but Albert Rösti (55), who has just been elected to the Federal Council. The Transparency Act will be a first touchstone for the old oil, auto and nuclear lobbyist.