EU mulling energy price caps, measures to cut power demand

Russia has slashed gas deliveries to Europe since Moscow attacked Ukraine, which has sent gas prices rocketing to record-high levels and left countries scrambling to buy non-Russian gas volumes and shield consumers from soaring bills.

“There is work on emergency measures on electricity prices. There might be also something on demand reduction for electricity,” Mechthild Woersdoerfer, Deputy Director General of the Commission’s energy department, told a meeting of European Parliament’s energy committee.

European Commission chief Ursula von der Leyen will outline the Commission’s ideas on capping energy prices in a speech on Sept. 14, Woersdoerfer said.

That will come a few days after European Union countries’ energy ministers hold an emergency meeting on Sept. 9 to discuss their response to a surge in energy prices that is hammering Europe’s industry and hiking household bills for the coming winter.

Brussels is also looking into taxing windfall profits companies make from soaring energy prices, Woersdoerfer said. EU countries are responsible for their national taxes, and the Commission said in May that governments can tax companies’ profits from high gas prices and use the proceeds to offset higher electricity bills.

Italy has already introduced an energy windfall levy. Any EU-wide tax would need approval from all 27 member countries, a high bar for approval.

Some country leaders are demanding more EU action to rein in costs. Italy, Belgium and the Czech Republic are among those seeking a bloc-wide gas price cap, while France and Greece want Europe to decouple the price of electricity from the surging price of gas.

The Commission is also looking into an overhaul of the EU electricity market design. Woersdoerfer said those reforms would be a longer-term measure, and Brussels would come up with “concrete options” for the changes after von der Leyen’s speech.