Companies to receive location for gas price brake

Sat 5th Nov, 2022

Image by TalpaAccording to a media report, companies should only be relieved by the gas price brake if they maintain their sites, according to the idea of the expert commission appointed by the German government.

For this, the companies should have to conclude a location and transformation agreement, writes the "Handelsblatt," which has excerpts of the commission's final report. The report will be presented in Berlin on Monday.

In its interim report, the expert commission had proposed using subsidies to limit the gas procurement price for large industrial consumers to seven cents per kilowatt hour for the first 70 percent of consumption. Around 25,000 companies in Germany would be eligible for the aid, which is to take effect from January.

According to the Handelsblatt newspaper, the commission has now formulated the conditions for the state aid in its final report: "As a rule, the maintenance of the location is demonstrated by a location and transformation agreement between collective bargaining or operating parties or in the supervisory board with equal codetermination."

If such a structure does not exist at a company, the Commission proposes an exception. Affected companies would then have to prove the preservation of 90 percent of jobs for at least one year beyond the end of the state aid. "Otherwise, the support received must be repaid," the report says.

Accordingly, the Commission did not agree to link the use of the gas price brake to a ban on distributions of salary bonuses and dividends. This had been demanded by politicians and some members of the Commission. The decision for this part in the final report was not unanimous, the "Handelsblatt" reported from participant circles.

According to a report in the "Frankfurter Allgemeine Zeitung" (FAZ), the Commission is insisting on its model for a one-off payment to gas customers in December. It sees this as a greater incentive to save money than the government's draft legislation, which became known last week.

The Commission proposes a one-off payment for December based on the consumption on which the September budget billing payment was based. The fact that the amount of the payment is based on the September budget billing is intended to prevent consumers from heating wastefully in December and thereby consuming a lot of gas and state money.

The utilities consider this path viable and quickly implementable, reported the "FAZ" with reference to information from the Commission. The government's draft bill, on the other hand, provides a calculation basis for the relief, which would increase with higher gas consumption in December.

Accordingly, the total annual consumption for the year 2022 is to be determined and then a twelfth of this price is to be reimbursed. In this context, the price would apply as of the cut-off date of December 1.

The higher the consumption in a household in the heat-intensive month of December, the greater the financial relief would be, according to the commission. The administrative effort could also be higher.

The expert commission gas and warmth compiled suggestions on behalf of the Federal Government, in order to relieve households and enterprises in view of extreme gas price increases. It hands over its final report to the Federal Government on Monday.

The German Association of Energy and Water Industries (BDEW) stressed the need "for the relief to reach people and companies quickly and without red tape."

BDEW President Marie-Luise Wolff, who is also a member of the expert commission, added: "We as the energy industry are the central service provider for this and will immediately mobilize all capacities and competencies."

The noticeable relief in gas prices proposed by the commission "stabilizes private households, secures the competitiveness of Germany as a business location and thus also protects the labor market," Wolff said.

Image by Talpa


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