FRANKFURT (Reuters) - Germany has imposed a levy on power producers as part of a 65 billion euro ($64.46 billion) package to help shield consumers from runaway energy prices and to help generate less expensive supplies.
The levy aims to redistribute power profits from producers that have benefited from high gas prices. It replaces an earlier plan for a windfall profit tax. [NG/EU][EL/DE]
The Finance Ministry, led by the Free Democrats (FDP), a pro-business party in the coalition government wants lower taxes, has demanded that the new levy should not be termed a tax.
Below are details of what we know about the levy, based on a paper agreed by the cabinet and seen by Reuters:
HOW WILL THE NEW TAX WORK?
The government wants to share out the "unintended" extra profits reaped by generators producing electricity from renewables, coal-fired plants and nuclear power stations that have benefited from selling electricity at higher prices without having to pay for surging gas costs, the paper said.
Production volumes would be capped at "a maximum return" and the rest paid back under the new levy. However, the paper did not say at what electricity price threshold the levy would kick in or say precisely how the extra profit would be skimmed off.
Companies producing power from fossil fuels and renewables that could be affected by the levy include RWE, Uniper and EnBW.
HOW MUCH WILL BE RAISED AND HOW WILL IT BE USED?
The government paper said the levy would raise revenues amounting to double-digit billions of euros.
The funds would be spent on ensuring all households received a "basis supply" of power at relatively low prices and would also be used to help reduce costs associated with transmission that form part of a consumer's energy bill, the paper said.
A similar EU-wide cap could be brokered at a meeting of European energy ministers on Sept. 9.
($1 = 1.0084 euros)
(Reporting by Vera Eckert; Editing by Miranda Murray and Edmund Blair)