VERBUND to increase electricity prices for existing customers in March
Sharply higher procurement costs for 2023 require an increase in the electricity tariffs for household and commercial customers.
- Government electricity price cap having noticeable dampening effect on prices
- Hardship cases are additionally being cushioned with €10m assistance fund
- Ambitious investment programme in renewables being continued
The market prices for energy sources have risen considerably on the relevant European procurement markets since autumn 2021. The reasons for this development are manifold. Above all, concerns around the security of energy supplies following the invasion of Ukraine combined with ongoing high demand led to unprecedented price increases for all sources of energy.
Procurement up to two years in advance
VEBUND sales also has to purchase electricity at market prices, despite generating it itself within the VERBUND Group. Top priority for VERBUND here is the security of supply for its more than 500,000 existing customers, especially in times of great uncertainty and sharp price fluctuations. The procurement of electricity for end consumers is therefore done on the basis of long-term price hedging over a period of up to 2 years in advance, in order to be able to offer the most stable end customer prices.
The procurement costs for electrical energy for 2023 have risen by more than 170% compared to 2022 and by over 400% compared to 2021. VERBUND does not pass this increase in procurement costs on to end consumers in full, but only increases the energy prices – in line with what is legally possible – to the absolutely necessary extent:
Price increase for existing customers from 1 March 2023
The working price of electricity customers with a standard load profile in the household segment is going up to 23.9 cents per kWh net or 28.68 cents per kWh gross. On the basis of the rise in the consumer price index (CPI), the basic price is going up by an average of 22 cents per month.
Short-term price adjustment in the new customer segment
While procurement for existing customers happens over the long term, it is possible to react quicker to price movements in the new customer segment. VERBUND is reflecting falling wholesale prices – albeit from a very high level – by lowering the tariff to 33 cents per kWh net or 39.6 cents per kWh gross.
Electricity price cap significantly reducing the effects of the price increase
The government's electricity price cap, which has been in place for private households since 1.12.2022, reduces the electricity price for an annual consumption of 2,900 kWh to 10 cents per kWh net until 30.06.2024. Depending on the annual consumption, this noticeably dampens the effects of the necessary energy price adjustment, and in many cases the increase is even fully offset.
- For an average electricity customer with an annual supply of 3,500 kWh, this price increase means additional costs of around €5 per month (incl. VAT) under consideration of the government's electricity price cap.
- For an annual consumption of less than 2,900 kWh – which affects over half of existing VERBUND customers – this price change will not lead to any increase in energy costs.
Energy costs make up around half of the energy bill; the rest goes on network charges, taxes and levies.
€10m in the VERBUND hardship fund
VERBUND has set up a hardship fund in the amount of €10m for customers who are particularly badly affected by the rising cost of living. In addition to the government's electricity price cap, the VERBUND hardship fund also offers effective support through a lowering of energy bills. All requirements for this and further information on applying for assistance can be found at www.verbund.at/verbundhilft (German only).
Further support options
The VERBUND-sponsored electricity assistance fund initiated by Caritas has been helping people affected by energy poverty in Austria since 2009. 16,000 affected people – regardless of their energy provider – have so far been able to receive support in the form of grants for energy bills, for appliance replacement campaigns and for the purchase of energy-efficient appliances. For 2023, VERBUND has boosted this support payment to Caritas to €5m. More information from the 71 social counselling centres of Caritas and at [///] VERBUND's electricity assistance fund of Caritas solves energy problems. PV feed-in tariff will be adjusted at the same time
VERBUND customers who produce environmentally friendly electricity from their own photovoltaic system receive more for their green electricity feed-in: for excess energy fed via VERBUND into the electricity grid, there will also be an increase in the feed-in tariff at the same time as the adjustment of the energy prices in electricity supply contracts.
From the middle of January 2023, VERBUND will write a personal letter about the new prices that will apply from 1 March 2023 to all customers affected by the price guarantee. Customers who are not in agreement with the price increase can exercise their statutory right to give notice by the end of February. The price change will take place on the basis of the General Terms and Conditions (GTC) of VERBUND AG and is based on the statutory provision of Sec. 80(2a) ElWOG 2010.
VERBUND is the driving force of the energy transition in Austria. As Austria's largest sustainable electricity generator, VERBUND relies massively on the expansion of renewable energies, in order to implement the climate targets and the exit from fossil sources of fuel. For this, the company is investing €1 - 1.5bn per year, around €15bn in the next 10 years. With these investments, generation will be increased by up to 8 TWh through expansion and efficiency increases, and thus supply a further 2.3 million households.