On Friday, the federal cabinet passed the draft law for the energy price brakes by Economics Minister Robert Habeck (Greens) in a circulation procedure.

The relief for private households and small and medium-sized companies is to come into force on March 1, 2023 and will also be paid out retrospectively for January and February.

For industrial companies, the start of the aid was planned for January anyway.

Julia Loehr

Business correspondent in Berlin.

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The details of the passed draft legislation essentially correspond to those that have been known since the start of the departmental vote on Tuesday.

The gas price will be capped at 12 cents per kilowatt hour for households and tradespeople for 80 percent of their forecast annual consumption in September 2022 - which usually corresponds to the previous year's consumption.

The state pays the difference to the contractually agreed price.

The energy suppliers are to reduce the monthly advance payments from customers accordingly from March onwards.

Anyone who saves gas will get a credit note from their supplier at the end of the year, as is the case now.

The contractually agreed kilowatt hour price should be decisive for the amount, even if you save more than 20 percent, i.e. move in the state-subsidized price range.

The federal government hopes that this will provide an incentive to save energy.

Random prizes will not be skimmed off until December

The price brake for district heating will be withdrawn at 9.5 cents per kilowatt hour, for electricity at 40 cents.

This also applies to 80 percent of the consumption forecast.

Somewhat different figures apply to industrial customers: They receive 70 percent of their previous gas consumption for 7 cents per kilowatt hour, district heating for 7.5 cents and electricity for 13 cents.

Unlike private customers, these are net prices.

What is new in the draft legislation that has been passed is that the skimming off of electricity generators’ chance profits should only take place from December 1, 2022 and not from September, as originally planned.

The duration of the levy is initially limited to June 30, 2023 and, according to government circles, could be extended by statutory order until April 30, 2024 at the most.

As a result, it is estimated that one billion euros less will go to the state.

For the gas and district heating price brake, a total of 54 billion euros is to flow from the economic stabilization fund, which is filled with 200 billion euros, for the electricity price brake there is talk of around 30 billion euros.

A contentious point was whether companies should continue to pay dividends or bonuses for managers if they take advantage of the aid.

The draft law only prohibits this in the case of direct equity support.

However, this could change in the course of the deliberations in the Bundestag.

According to current planning, the Federal Council is to adopt the price brakes on December 16th.