A month ago CREG was talking about annual increases of up to 600 euros. Today the annual price increase for gas could look more like 598 euros with that for electricity at 116 euros extra. In total that means a possible 714 euros extra on a householder’s bill. Given the anticipated future development of prices CREG believes the real figure could be even higher soon.
One of the options open to the government is to keep more people on the social tariff. Only people on low income qualify for this lower rate. The group that qualified was increased to 900,000 households last year, but 450,000 households are supposed to return to normal tariffs at the end of this year. The government could extend this measure.
The government could introduce energy cheques like in France. These can be used to pay your energy or electricity bill. The government would then have to decide who qualifies.
Another option is a cut in VAT on energy bills. The current rate of 21% was cut to 6% in 2014 and 2015. This is a measure that would benefit all, not only people who need help most, and it would also delay index-linked pay increases.
The government could also reduce taxes on energy when prices pass certain thresholds.
A price freeze is also an option. This happened in 2012, but CREG warns this passes the buck to energy suppliers, some of whom could go out of business. The regulator is calling for greater transparency in energy contracts and a limited number of tariff formulas as the present situation makes it hard to make price comparisons.
CREG urges consumers to take action to cut long term energy consumption. Government measures here are mainly a matter for the regions. The regulator also recommends landlords look at housing and appliances that consume wasteful amounts of energy.
CREG is expected to report on the profits in the nuclear and windfarm sector within two weeks