This was confirmed by insiders in The Hague on Monday. One of the options that the government is looking at is setting up an energy emergency fund. This would enable the government to help people who are at risk of being cut off from gas and electricity because they have a large payment arrears with their energy supplier. Instead of via an emergency fund, this financial aid could also be arranged through an extension of the special assistance.
Another option that officials are looking at is setting a national tariff cap. Energy suppliers may then not charge their private customers more than a maximum price for energy set by the government. France has already imposed such a restriction: there, energy suppliers are allowed to increase the price that consumers pay by a maximum of 4 percent this year.
A third option is to offer people with payment problems additional legal protection. Households that agree a payment arrangement with their energy supplier should then no longer be cut off from gas and electricity. At present, such protection only applies to families undergoing debt restructuring, i.e. only to people with long-term, unsolvable debts.
This year
During the purchasing power negotiations of two weeks ago, the coalition did not see any opportunities to repair purchasing power this year. The purchasing power measures that the government decided at the time will all take effect next year. In the meantime, the cabinet has apparently become convinced that something must be done this year anyway, because otherwise too many households will be without gas and electricity this winter.
Officials at the ministries of Finance, Economic Affairs and Climate and Social Affairs are feverishly working on an emergency aid plan. Next Friday, the Council of Ministers must assess a number of draft proposals, after which officials will further elaborate the most promising ones.
The government is exerting considerable pressure on the energy companies to make a (financial) contribution to emergency aid. After all, the sector also has an interest in ensuring that energy consumers continue to pay their bills. The cabinet does not feel like helping the companies completely by paying all the unpaid bills of defaulters from the treasury. The government requires a return from the energy sector.
energy companies
Essent, Eneco and Vattenfall, among others, met on Friday and Monday to discuss possible solutions. The companies reportedly would like the government to make it harder for consumers to break long-term energy contracts. At the moment the fines are low, and it is therefore attractive to change provider if a competitor offers (much) lower prices, even if the current energy contract continues for a number of years.
The energy companies argue that as a result they have to factor in high risk premiums in their prices. After all, they cannot count on a customer actually completing a contract of several years. These risk premiums make all energy contracts structurally more expensive, the energy companies complain. It is currently not clear whether the government is sensitive to this complaint and whether it wishes to restrict consumer rights in this regard.
A major dilemma in the proposed emergency aid is the risk of fraud. If the government takes over the payment obligation of defaulters, some consumers who can pay their energy bills will suddenly no longer do so. The government also rewards bad behavior: people who turn their thermostat down and turn every dime to pay the bill will then receive no help, while those who live inefficiently get everything reimbursed. The energy companies should check whether these are real energy poor, but they do not immediately have the resources to do so.