Leuenberger proposes plan to dim electricity price hikes

Power companies want to raise electricity prices by 15 per cent on average next year Keystone

Energy Minister Moritz Leuenberger wants electricity companies to limit the value of their power networks to curb massive energy-price increases for consumers.

The national power grid operator, Swissgrid, caused a public outcry when it announced in late September that electricity prices would double over the next five years.

Leuenberger said the proposed measures would include a reform on how power grids depreciate and a reduction in reserve energy costs. Both are needed to stabilise power levels and prevent blackouts and would help reduce proposed prices increases by up to 45 per cent.

“I hope the cabinet approves the measures this year so that they can take effect by April next year,” he said.

Leuenberger made the announcement following a meeting on Friday with representatives of the power industry, the energy regulator as well as cantonal and local authorities.

He called on all sides to be aware of their responsibility and to contribute to a reduction in planned increases in electricity prices.

During the autumn session of parliament, Leuenberger had accused the national power line operator of illegally raising its tariffs.

Common ground

Electricity companies as well the cantonal and local authorities are cautiously optimistic about the measures.

“We have found common ground, but it remains to be seen whether we have found a solution,” said Kurt Rohrbach of the Swiss Electric Company Association, the umbrella organisation of the country’s power producers.

He said he was concerned that the proposed measure could discourage new investments in power companies.

In a similar vein, Daniel Brélaz, mayor of Lausanne and representative of the Association of Swiss Cities, proposed a two-tier system that would benefit local power producers and those supplying renewable energy.

The electricity regulatory body, Elcom, called for concerted efforts but cautioned against too many changes, as the electricity sector is preparing for a major change in its power grid.

Elcom President Carlo Schmid said it had received about 2,000 complaints about the planned price increases.

Liberalisation

Leading business as well as well as political parties strongly criticised the utility services for planning price hikes of 15 per cent on average this year.

The Swiss Business Federation called on the power-line operator to lower its tariffs, while power producers should curb their levy on green electricity.
Manufacturing firms argued higher electricity costs would hamper their competitive edge, while retailers warned of the impact on consumers.

Trade unions threatened to block further steps towards a liberalised electricity market.

Three years ago parliament voted for a two-stage approach to open up the country’s electricity market. By 2014 private homes will be free to choose their electricity providers, following liberalisation for major companies.

swissinfo, Urs Geiser

Swiss Power

There are about 800 electricity companies in Switzerland.

A national power grid operator became operational in 2006 replacing the seven existing regional grids.

Negotiations are underway between Switzerland the European Union for a bilateral treaty aimed at regulation access to cross-border electricity and streamlining security standards.

Non-EU member Switzerland considers itself an electricity hub in Europe.

Household power prices

Households have to brace themselves for price increases of between 8-13 per cent in 2009.

The data is based on a survey of power utilities that provide electricity to about one third of Swiss households.

The increase is also a result of the higher costs for the transmission of power, according to the Swiss Electric Company Association, the umbrella organisation of the country’s power producers.