Utilities Cautious Over EU Tax And Solidarity Measures

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Last week, the European Commission tabled its latest set of measures to help reduce bills for struggling consumers and businesses in the European Union. Brussels proposes a temporary revenue cap of €180 per megawatt hour ($180/MWh) on "inframarginal" producers such as renewables, nuclear and coal-fired generators. Or basically, most generators that don't use gas. Money generated through this proposal could reach €117 billion a year, according to Commission estimates and would be used to bring down energy bills. The second item focuses on gas-fired generators. They will be subjected to a separate clawback measure in the form of a "solidarity contribution." This measure "covers profits which are above a 20% increase on the average profits of the previous three years, at a rate of at least 33%," according to Brussels, and could generate €25 billion a year. The idea is to bring some top-down EU intervention into member states and fight the energy price crisis in a uniform, non-fragmented way. Revenues will be collected by member states and they have the final say on how funds are distributed.

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