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Swiss price watchdog lays out options for slashing electricity costs

Cutting down on fees for the grid connection could save consumers around CHF350 million ($365 million), according to Meierhans. © Keystone / Salvatore Di Nolfi

By reducing grid connection fees and municipal duties, the federal government could help to keep electricity bills down, Stefan Meierhans told Le Matin Dimanche newspaper.

Meierhans said it is possible for the government to change the framework conditions that would allow a lowering of fees for using the grid. Such a move, which he has already recommended to the cabinet, could save consumers around CHF350 million ($365 million), he said in an interview published on Sunday.

The price watchdog also said he regularly recommends to the authorities that they abolish concession duties. Together these two measures could reduce the final electricity bill by up to 10%, he said.

Last week the Federal Electricity Commission announced consumers can expect to pay more for electricity in 2023. Not only is the price per kilowatt hour going up, but network connection fees and municipal duties are also set to rise. Meierhans had previously warned that grid fees in Switzerland were already “extremely high”.

“What is striking is that the increase is brutal,” even if other parts of Europe are facing comparatively higher inflation rates, he told the newspaper.

Dividends and bonuses

Another option, the watchdog said, would be for the cantons and municipalities that own electricity companies to pay back part of the dividends they receive from these companies. It is up to political leaders, too, to address the significant differences in electricity prices between the regions, he added.

The country’s leading electricity company, Axpo, has been granted a CHF4 billion credit line from the federal government to prevent the firm from running into a liquidity crisis as a result of rising energy prices. One of the conditions attached to the loan is a ban on paying out dividends. CEO Christoph Brand told the SonntagsZeitung that senior managers at Axpo, which is owned by cantons in central and eastern Switzerland, will also forgo their bonuses if the company uses the loan, and until the money is repaid.

“No one in the industry thought it was possible for prices to rise at this dizzying rate and to these levels,” Brand said in a separate interview with the SonntagsBlick. “The fact that we asked the state for help as a preventive measure does not make us proud,” he added. “It’s a lot to swallow.”

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