Vienna Wien Energie, the supplier of the Austrian capital, is in acute financial difficulties. How far-reaching the problems are, could only be guessed on Monday: In the early afternoon, the social democratic finance city councilor Peter Hanke sent a letter to the federal government’s finance ministry, in which he asked for six billion euros.
The plight of the energy company only became known on Sunday. It was said that the need was almost two billion euros.
Wien Energie occupies a central position on the Austrian electricity market. The company supplies two million people and 230,000 companies. The company is fully owned by the City of Vienna, which, with its various holdings, is also an economic heavyweight.
With reference to trade secrets, Wien Energie only commented in general terms on the reasons for the billion-dollar hole. However, she contradicted rumors that the energy company with its 2,000 employees was insolvent.
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The company made the emergency clear in several tweets, but emphasized that security of supply would remain guaranteed.
Obviously, however, it is about futures transactions on the electricity exchanges. Like other companies, Wien Energie uses futures to hedge against price fluctuations.
The enormous upward swings in view of the uncertainty resulting from the Ukraine war – on Friday alone the electricity price in Austria rose from 700 to around 1000 euros per megawatt hour – make high back payments necessary to maintain the insurance.
Austrian federal government is negotiating with Wien Energie
At least part of the billions now urgently needed must be used for this. According to the Austrian Ministry of Finance, if the payments are not made, the deliveries are no longer guaranteed.
The latter is now negotiating with Wien Energie about the conditions for the aid. The federal government has “the instruments and the will to help the city of Vienna in this financial emergency”. However, additional information is needed for this – a hint that can certainly be seen as an implicit criticism of the partially non-transparent structures of the city’s economic participation.
The opposition, albeit weak and powerless themselves, appeared angry in Vienna’s municipal council: Their representatives complained that they only found out about the financial problems from the media. You have no control rights over the subsidiary of Wiener Stadtwerke.
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According to the Greens, who until recently were still in the city government themselves, the city hall has already stepped in financially on several occasions to settle additional payments in the billions. However, it has now evidently come to the conclusion that it can no longer cover the shortfall on its own.
However, experts are also irritated, primarily because the financial problems allegedly became so acute almost overnight. Uncomfortable questions are therefore being raised for the Austrian capital about the internal control mechanisms in its holdings. It is also conceivable that Wien Energie made a blunder, for example by relying too heavily on long-term stable or falling prices.
Other suppliers report no serious financial gaps
The company does point out that, as a major player, it is particularly hard hit by rising prices on the energy market and that German cities have similar problems. Uniper also got into difficulties due to futures transactions, among other things, and therefore received support from the state.
At least in Austria, no other suppliers have so far reported a similarly severe financial shortage.
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