PRAGUE (Reuters) -A Czech proposal to impose staggered revenue caps on prices charged by electricity producers by the type of power plants they operate would bring much higher revenue next year than the 15 billion crowns ($620.50 million) budgeted so far, Finance Minister Zbynek Stanjura said on Wednesday.
The Industry Ministry has proposed caps ranging from 70 euros per megawatt/hour of electricity made at nuclear power plants to 230 euros for power made at some lignite plants.
Ninety percent of revenue earned by firms above that cap would be taken by the government to fund compensation schemes for customers burdened by power prices that have soared since Russia’s invasion of Ukraine.
“As proposed, it will bring much higher revenue than 15 billion,” Stanjura told reporters.
Government revenue from the cap would be in the high tens of billions of crowns under the current proposal, he said.
The Czech plan is based on the European Union’s agreement to cap power producers’ revenue at 180 euros per megawatt/hour, which allows member state to alter the cap for some plants depending on the type of fuel they use and their investment costs.
Higher revenue from the caps would, on the other hand, lower energy firms’ profits and thus also the government’s take from a windfall tax, already approved by the lower house of parliament, Stanjura said.
Overall, he said the ministry’s forecast of raising 100 billion crowns from the windfall tax and the revenue caps next year was conservative and final takings may be higher, he said.
The company expected to be most affected by the revenue caps and the windfall tax is the majority state-owned electricity producer CEZ.
The Czech revenue cap proposal goes beyond the EU agreement by suggesting validity from Dec. 1 this year until the end of 2023, while the EU agreement only runs until June 30, 2023.
Stanjura rejected objections by private investors and some government colleagues to the schemes, saying it did not amount to double taxation and it was also acceptable to enforce the caps for the whole of 2023.
(Reporting by Jan Lopatka; Editing by Jon Boyle and Louise Heavens)
