Sedan Electricity prices in daily trade have fallen by around two-thirds since mid-December. Currently, only 130 euros are paid on the Leipzig Stock Exchange EEX for one megawatt hour of electricity. However, letters with price increases from their suppliers still find their way into consumers’ mailboxes.

“We did not exceed 1,000 euros per megawatt hour in August in the basic supply. But only about 30 percent,” he defended. EonCEO Leonhard Birnbaum announced the price increases on Tuesday in Berlin at the Handelsblatt energy summit.

Customers of the Essen energy provider only received mail with drastic increases in January. For customers outside of basic service, costs will sometimes double starting March 1. From 26.9 cents per kilowatt hour, it sometimes goes up to 50.11 cents.

“In general, these customers mostly come from a very low price level, which no longer corresponds to the market situation as we have seen it for more than a year,” ein explains. Eon– Spokesperson at the request of the Handelsblatt. What was observed in the electricity exchanges last year is now slowly being reflected in the prices for the end customer.

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By the end of November, many municipal utilities had already announced massive price increases for the new year for the same reason. In Leipzig and Munich, basic electricity supply rates will increase by almost 150 percent starting this month. A kilowatt hour now costs 52.12 pence in Leipzig and as much as 61.89 pence in Munich.

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“We’ve doubled the price of gas and quadrupled the price of electricity, so we can’t give the go-ahead yet,” Birnbaum said, preparing consumers for continued high prices.

But this applies above all to basic providers. According to the comparison portal Verivox, a kilowatt hour of electricity cost 36.8 cents in Grundversoger in October; it is currently 46.6 cents, up 27 percent. On the other hand, a kilowatt hour of electricity for new customers cost an average of 56 cents in the same period, currently it is 42.7 cents and therefore 24 percent less.

Discussion at the Handelsblatt Energy Summit

Electricity prices continue to be the focus of the industry.

(Photo: Dietmar Gust, Euroforum)

In principle, it is understandable that consumer prices are rising. After all, a megawatt hour of electricity cost €444 in daily trade a month ago. Throughout 2022, energy exchanges jumped from one record to another.

However, the situation has calmed down for a few weeks. During the first 15 days of January, the Federal Network Agency even wholesale prices in the negative range. Negative electricity prices occur when there is a surplus of electricity. In other words, when production exceeds consumption. Such a situation arises, for example, with a very high feed with inexpensive wind power. Meanwhile, prices have dropped to €29 in some cases, below what they’ve been for more than a year.

In general, the price level remains historically high. Before the start of the energy crisis, average annual prices ranged between 35 and 55 euros per megawatt hour.

Gas price: gas is still significantly more expensive than before the crisis

The development is even clearer for gas. After all, the wholesale price alone has risen more than 700 percent in the past year. Meanwhile, markets have calmed down again in view of the relatively mild winter. Currently, a megawatt hour (MWh) of natural gas only costs around 45 euros on the Dutch TTF exchange.

But here, too, the pre-crisis level is a long way off. On average, prices at that time ranged from ten to €25 per megawatt hour. Currently they are almost four times higher.

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“Anyone who has bought expensive should of course also broadcast the prices now,” says Ramona Pop, president of the Federal Association of Consumer Organizations, at the Handelsblatt Energy Summit.

While prices for new customers on the basic service are rising, other providers have long been able to find cheap rates again. So it might be worth switching back. “However, that’s not always the best solution,” says Pop, warning against always going for the cheapest provider: “We saw last year how quickly this can end.”

Consumer Advocate Ramona Pop

“Anyone who has bought expensive now, of course, must also convey the prices.”

(Photo: Dietmar Gust, Euroforum)

Pop was alluding to cheap electricity providers like Stromio. At the start of the energy crisis in late 2021, tens of thousands of customers had already terminated their contracts overnight because, with their very short-term acquisition strategy and horrendous stock market prices, they could no longer afford to deliver power at promised prices.

Meanwhile, high electricity and gas prices are also weighing heavily on households. That is why the federal government is supporting private customers and companies from March 2023 with the so-called electricity and gas price brake. The regulation states that consumers will soon only have to pay 40 cents per kilowatt hour for electricity and twelve cents per kilowatt hour for natural gas. This applies to 80 percent of average consumption.

The State reimburses the energy provider for the difference between the limited 40 or 12 cents and the actual rate. Those who are particularly frugal should even get the money back. The regulation will apply retroactively from January.

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Some providers had massive price increases after the announcement. The surcharges are so drastic across the board that, according to some experts, this can no longer be justified by rising electricity and gas acquisition costs. There was even criticism from within the industry. “The Cartel Office can ask for 70 cents per kilowatt hour,” State Secretary of the Federal Ministry of Economics Patrick Graichen announced on Tuesday in Berlin.

The gas price brake bill takes these considerations into account. Paragraph 28 states that gas suppliers are prohibited from increasing prices to an extent that does not result from market developments or an increase in acquisition costs. The electricity price brake bill contains the relevant regulations in paragraph 39. However, consumer advocate Pop emphasized: “There were notable moves. And we looked at it very closely.”

More: Removing benefits and price brakes: This is how the energy market will continue in 2023

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