Energy Minister Rob Jetten (D66) has to adjust his plans for setting the price ceiling for energy again. Thanks to this price ceiling, prices for a limited amount of gas and electricity will be maximized for consumers from the beginning of next year. The government will then bear the additional costs.
The minister had asked regulator ACM to determine how much subsidy the central government energy companies need to be able to make a reasonable profit, on top of the costs actually incurred. However, ACM informed Jetten last week that they have such a reasonable margin unable to determine. As a result, the minister has to change his way of subsidizing for the time being.
The regulator says that it can only make this calculation if there is sufficient historical data. “However, the current market conditions are very different from the recent past,” says ACM. In order to be able to say something about the profit, “a political consideration” is necessary.
For the minister, and also for the House of Representatives, ACM’s message is a disappointment. Politicians want to prevent the imposition of a price ceiling from leading to excess profits in the energy sector. For example, in the almost unanimously passed motion by Mahir Alkaya (SP), Jetten was asked to prevent excess profits due to the price ceiling, “so that the scheme does not finance extra bonuses and dividend payments”. To prevent abuse, the minister wanted to compensate the energy companies only for their costs, plus a reasonable margin, right from the start in January.
On Monday, Jetten announced that he will ask another advisor to determine a reasonable profit margin. As a result, the minister will be able to compensate the costs of the energy companies as he had in mind from 1 March at the earliest.
This does not mean that the introduction of the price cap for the consumer is delayed. In November and December, the energy customer already receives a compensation of (twice) 190 euros from his supplier.
From January, Jetten will reimburse the energy companies for the difference between the high energy prices that they have to pay on the market and the lower price ceiling that has now been set for consumers. „Excess profits“, so Jetten wrote to the Chamber on Monday, should be ‘avoided as far as possible by ex post control’. According to the minister, the risk is that the price ceiling, which will cover the majority of customers, means that ‘incentives to purchase efficiently’ can be limited at the energy companies. Via ACM and also with the help of price comparators, Jetten wants to minimize ‘the chance of overcompensation’.
A version of this article also appeared in the newspaper of November 8, 2022