Govt Plans Further Measures to Limit Electricity Prices

By , 04 Apr 2022, 11:49 AM Business
Govt Plans Further Measures to Limit Electricity Prices Gemjan CC-by-0

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STA, 2 April 2022 - Prime Minister Janez Janša has announced that the government will continue to intervene as long as necessary to contain high electricity prices. The main problem, in his view, is the European formula to calculate electricity prices that takes into account gas prices, but the formula is about to change.

"Until the formula is changed and this has not stabilised prices, we will continue to intervene," Janša said on Friday evening at a public debate in Vrhnika that wrapped up the government's visit to the southern communities of central Slovenia.

Under a legislative package passed in late January to mitigate high energy prices, electricity bills have been cut for the cost of network fees for three months until the end of April. Government data shows the measure reduced the bills by almost 40%.

Janša promised the government would continue to intervene. "We will take funds to finance the gap from the surpluses generated because Slovenian power producers are charging higher prices for electricity. Considering these are mainly state-owned companies, we will reallocate these funds," he said.

The main reason for high electricity prices on the European market is the formula, which Slovenia sought to change last year during its presidency of the Council of the EU. After several countries called for change in February this year, the European Commission decided to draw up a new formula, which is expected to come into force in May or June, he said.

"Prices will then be lower on the European market. They will not be what they were before the shock due to the war in Ukraine and the spike in energy consumption driven by the post-pandemic recovery and more money in circulation," Janša added.

The three-month freeze on electricity network charges is being challenged at the Constitutional Court by an association of small shareholders who hold stakes in electricity distribution companies.

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