# Electricity price brake and gas price brake: what consumers need to know

Dusseldorf Do you have an e-mail from your energy supplier in your inbox? Then your provider will probably inform you that from March 1, 2023 to April 20, 2024 you will pay less money for electricity, natural gas or district heating. With the energy price brake, the federal government wants to relieve consumers and companies with a view to the sharp rise in energy prices.

80 percent of the energy consumed by a consumer is capped. Electricity then costs a maximum of 40 cents per kilowatt hour, district heating 9.5 cents and natural gas twelve cents. Consumers continue to pay the individually agreed price for 20 percent of their consumption.

What do consumers have to do about it? How much cheaper will the energy bill be and how can you even earn something from it? Here are answers to the most important questions.

The following applies to every customer: the new monthly installment that consumers have to pay for electricity or gas will continue to be calculated individually. How much money can be saved depends on consumption and the contractually agreed price.

A spokeswoman for the largest German energy supplier Eon says: “As a rule, the new discount also takes price brakes into account.The energy supplier will promptly announce how high the new discount is in a letter in the next few days.

The basis for calculating the price brake is the annual consumption forecast for September 2022. A calculation example: If you live alone and consume 1000 kilowatt hours (kWh) of electricity per year, you will pay a price of 40 cents per kWh for 800 kilowatt hours with the price brake. For the remaining 200 kWh, the contract price of 80 cents applies here, for example. Without the price brake, you would pay 800 euros a year. With the price cap you save 320 euros – and pay only 480 euros.

The federal government has capped just 80 percent of the price, hoping it will keep consumers motivated to save energy. “Saving energy remains the order of the day,” says the Eon spokeswoman. Thomas Engelke, energy expert from the consumer advice center, adds: “The price brake only cushions the top prices.”

### Who benefits from the gas and electricity price brake?

Both consumers and companies will benefit from the price brake that will apply from March. However, they sometimes pay very different amounts, depending on the amount consumed. Unlike for household customers, the price of natural gas for industry is only capped up to 70 percent of consumption at seven cents per kWh. The regular market price is due for the rest of the consumption.

If consumers or companies still have contracts that are below the capped prices, they will not benefit at all from the energy price brake.

### How much is the relief?

Energy expert Engelke says: “The relief for gas can be over 1000 euros.” This is because the price brake has a particularly strong effect here. Because gas prices have repeatedly reached new highs since Russia’s war of aggression against Ukraine.

The price of natural gas is limited to twelve cents with the cap. A four-person household consumes an average of up to 18,000 kilowatt hours per year. The same applies here: the lower price of twelve cents applies to 80 percent of consumption. If you pay 20 cents under contract, you would have paid 3,600 euros per year for natural gas without a price brake. With the price brake it is only 2448 euros – a saving of 1152 euros.

>> Read here: Is it worth switching electricity providers now?

The Eon spokeswoman says: “How much consumers save is very individual.” This is also related to how much the higher gas prices have already been passed on to consumers, i.e. how much the contract price is above the price brake.

### What must consumers do now?

The electricity and gas price brake is automatically adjusted by the energy supplier or landlord when the payment is made. So if consumers have given a direct debit authorization for their account, the amount debited will change automatically. If consumers transfer the amounts themselves, they only have to adjust their standing order.

### Is the basic price also capped?

The basic price is not capped by the price brake, but: “Increases that can be influenced by the energy supplier themselves are frozen at the level of September 2022,” says the Eon spokeswoman.

The basic price is a consumption-independent fee, for example for the electricity or gas connection. Should this change, it could be related to higher network charges. However, these are not influenced by the energy supplier. Expert Engelke says: “The basic price differs from provider to provider.”

### Up to what consumption do the electricity and gas price brakes apply?

The electricity price brake applies to annual consumption of up to 30,000 kilowatt hours, the gas price brake to private households and companies with an annual consumption of less than 1.5 million kilowatt hours.

There are cheaper prices for companies that use more than 1.5 million kilowatt hours of gas than for consumers. Here the gas price is capped at seven cents per kilowatt hour, according to Eon. However, this only applies to 70 percent of the delivery quantity that was consumed in the 2021 calendar year.

>> Read here: Up to 600 billion euros: The energy transition requires enormous investments

Companies with a power consumption of more than 30,000 kWh pay 13 cents per kilowatt hour. This affects 70 percent of the currently forecast consumption forecast.

### What do tenants have to consider?

The energy supplier or the landlord will inform you about the new deduction. Especially when it comes to heat, landlords often have a contract with the gas or electricity supplier.

Engelke from the consumer advice center advises: “You should take a close look at your bill and read your consumption yourself more frequently on the meter.” In addition, consumers could check whether the price brake applies to them and compare the new deductions with the old ones.

### Is there a price brake for heating oil, pellets and other fuels?

Heating oil, pellets, liquid gas and coal are not covered by the energy price brake. In this case, the federal and state governments still have to agree on a hardship case procedure. The federal government is providing 1.8 billion euros for this.

Consumers should then be able to apply for the money in the federal states. Energy expert Engelke explains: “Consumers must submit bills from 2022 and can receive a maximum of 2000 euros per household.”

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First publication: 02/28/23, 4:45 p.m.

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