The aid to electricity suppliers proposed by the Federal Council is sealed in consultation
Due to the explosion in electricity prices and the market volatility intensified by the war in Ukraine, the Federal Council wants to guarantee the supply of electricity. © Keystone
Published on 06.05.2022
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Electricity ” The rescue mechanism for electricity suppliers proposed by the Federal Council is not going well in consultation. The industry is not opposed to the parachute per se, but to its design. For the bourgeois parties, liquidity is a business concern. The PS supports the project.
Due to the explosion in electricity prices and the market volatility intensified by the war in Ukraine, the Federal Council wants to guarantee the electricity supply with a rescue mechanism endowed with 10 billion francs. The consultation ended on Wednesday.
High prices are driving up collateral, raising fears for electricity suppliers’ liquidity. According to the Federal Council, the parachute will be compulsory for systemically important companies. It will be linked in particular to requirements in terms of transparency, a return on loans in line with the market, plus a risk premium of 20% and a ban on distributing dividends.
The opposing companies
The Association of Swiss Electricity Companies (AES) welcomes the principle of a subsidiary and optional emergency measure. But she considers the strict conditions imposed by the Federal Council “disproportionate, prejudicial and of an unprecedented scale”.
Utilities are already risk-proofed and doing well financially, writes the AES. Instead of selectively targeting the three systemically important companies Axpo, Alpiq and BKW, the parachute should be accessible to other companies.
The umbrella organization economiesuisse supports the approach of the rescue mechanism, but criticizes the obligation of participation of the three groups of systemic importance. This is a huge attack on economic freedom. And the association finds the 20% risk premium exorbitant.
Creeping nationalization
The three groups concerned also approve of the measures aimed at guaranteeing security of supply. But the Lausanne energy company Alpiq judges several aspects of the proposal to be counterproductive and proposes adaptations to the government’s plan.
For Alpiq, the fact that the measure provides for compulsory coverage and numerous obligations for companies, whether or not they have recourse to a loan, would undermine economic freedom. The measures must not pave the way for a creeping nationalization of electricity companies, he warns.
Alpiq also believes that Switzerland should work together with other European states to adapt the framework conditions for electricity exchanges. This is to prevent market volatility from causing excessive tying up of cash.
In separate statements, the energy companies Axpo and BKW, on the other hand, reject the Federal Council’s plan. Aargau’s Axpo describes the measures as disproportionate, arbitrary and barely constitutional. For the Bernese BKW, the project goes well beyond the intended objective.
The bourgeois parties
The bourgeois parties are also skeptical. The UDC fundamentally rejects the project, judging that it is up to the owners to provide the companies with sufficient means. For the PLR, the Confederation must intervene only in cases of extreme urgency. According to them, the plan sets a dangerous precedent with unpredictable consequences for other sectors. The Center welcomes the project, but requires clear and strict guidelines to support it.
The PS finds the parachute and compulsory membership sensible for systemically important companies, but wants to consider whether it should not be accessible to other electricity companies. The Greens believe that the security of supply must be at the center of concerns and not the rescue of electricity companies. The Vert’liberals recall that the reserve parachute should only be used as a last resort. ATS
