This applies if you are stuck on a cheap electricity or gas tariff

The new gas and electricity price brake applies retroactively to 1 January from 1 March. They bring much-needed relief to millions of customers in the new year.

The price brake stipulates that energy suppliers must set a ceiling on electricity and gas prices. However, there is an important catch. The two price brakes only apply to 80 percent of the previous year’s consumption of electricity and gas. For the remaining 20 percent, the fixed labor price does not apply.

When it comes to electricity, energy providers may not charge more than 40 øre per kilowatt hour for 80 percent of consumption. It is 12 øre per kilowatt hour for gas and 9.5 øre per kilowatt hour for district heating.

High electricity and gas bills in January?

The electricity price brake comes into effect from 1 March, but the calculation will then have retroactive effect to 1 January. Conversely, this means that consumers pay in advance in January and February and are then reimbursed the respective price brake in the form of a credit note.

In principle, the price brake becomes visible with the final invoice. Consumers need not worry about anything. Either the energy supplier or the landlord calculates the gas and electricity deduction on the new basis.

Do you have a cheap tariff? You must know

If you pay less than 40 øre per kilowatt hour for electricity, less than 9.5 øre per kilowatt hour for district heating and less than 12 øre per kilowatt hour for gas, you are among those who do not benefit from the price brakes. You then pay for your consumption without help from the state.

For example, if you pay 33 cents per kilowatt hour, it stays that way. The price does not rise to 40 øre because of the price brake.

The federal government is planning an expensive ban

Apparently the federal government is planning a costly ban on top of the January 1 electricity price brake.

There is a catch though.

The ban can only apply to price increases announced on 1 January. However, most municipal utilities, municipal utilities and energy providers are already notifying price adjustments because they must be notified at least six weeks in advance.

According to the drafts, price increases must be prohibited throughout 2023 – unless suppliers can prove “that the increase is objectively justified”. This applies, for example, when “market-based price and cost development” makes it necessary. Not every increase is therefore automatically illegal, the ministry explained. The expensive ban, on the other hand, only applies to increases that are “abusive and unjustified”.

Basically, the ban stipulates that energy suppliers must explain to the Federal Cartel Office exactly why they are raising the price.

Does the ban also apply to price adjustments from 1 January?

If the price increases are to come in early January, they must be announced four to six weeks in advance.

In fact, these price announcements would now also be directly covered by the planned braking rules: as far as the amount is concerned, actual purchase costs could be passed on, but not further abuse increases.

A wave of sometimes significant increases at the beginning of the year is already emerging, as comparison portals and consumer advocates observe. The price supplements vary from region to region.

The head of the Federation of Energy Consumers, Leonora Holling, told the newspaper “Bild” (Saturday): “We advise consumers to object.” The planned increases are not commensurate with the price development on the stock exchange.

What should consumers be aware of?

Answer and check for possible errors.

Do you have a price guarantee contract? Then the adjustment is also ineffective, says the Consumers’ Association.

If the provider remains stubborn: End the direct debit procedure and contact consumer advice or a lawyer.

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If you receive a letter about a price increase, you should read it carefully and pay attention to the details.

Make sure that the declared consumption, the prices, the amount of the new deductions and any bonus payments or discounts are entered correctly, as these items on the invoice can often be incorrect.

Remember that if you adjust the price, you must increase the payout yourself.

The energy supplier may not regulate the deduction himself. If the electricity provider has increased the deduction, you should ask for a written explanation.

Is it worth switching?

It is definitely worth checking if there is a cheaper tariff. This can either be with the same provider, or you can inquire online about possible alternatives. Note that basic providers often have lower rates than supposedly cheap providers.

Comparison portals such as the electricity price comparison from FOCUS online, a call to the energy supplier or simple research can help.

“Prices in the basic electricity and gas supply are currently lower than the prices for special contracts,” explains Rico Dulinski from the Brandenburg Consumer Center in Potsdam.

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