This is how the price brake on electricity works in Munich: explained in the bill

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Background: Julian Leamer

Price brake letters have been sent to 123,000 SMW customers so far © Panther Media GmbH

Stadtwerke München has sent letters about reduced electricity prices to approximately 123,000 customers. It noted: reliefs and new budget deductions. How to read a letter.

Munich – Because of the war in Ukraine, electricity prices have exploded. The federal government’s price brake is now designed to ease this enormous burden. It has been in effect since March – and it also applies retrospectively to January and February 2023. The price brake would mean consumers would have to pay a maximum of 40 cents per kilowatt hour for 80 percent of their previous consumption.

But until now, most SWM customers don’t know how it will affect them specifically. In March, SWM did not calculate any deductions or provide any relief information. Because the law had to be introduced in an extremely short period of time. But now the price brake is in mailboxes. Our newspaper uses an example to explain the most important numbers in a letter.

In this letter from SMW, you will find relief and deductions due to the slowdown in electricity prices
In this letter from SMW you will find relief and deductions due to the slowdown in electricity prices © private

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Electricity price brake for Munich households: how much help?

The relief amount is the amount customers have to pay less because of the electricity price slowdown – calculated over a year. This money is a state subsidy. In our example, it is 369.21 euros. The amount is individual for each account. Utilities distribute the assistance by month – this reduces the monthly payment.

In the example, the relief from January to September is about 33 euros. This means that without a brake on electricity prices, a family of four would effectively have to pay a deduction of €162 a month. The amount of assistance is reduced to 129 euros. One question remains: 369.21 euros divided by twelve months does not get 33, but a little less than 31 euros. The reason: the accounting period of the family is from September to September. This leads to the distribution of the benefit amount.

Why is there no deduction for March in the example?

In the example, the payment for March is missing. This is because customers would still have to pay their old discounts without a price brake up to and including March. In the example it was €95 (still the price of the previous year without the self-imposed increase). As the price brake takes effect retroactively, SWM abandoned the debit in March. Therefore, part of the benefit amount (see left) is reimbursed for the first three months.

In the example, the customer is released from the price brake for 33 euros per month. As he had not received this benefit by March, SWM owed him €99. To compensate for this, the (old) debit of €95 was canceled in March. The client receives the remaining amount of four euros together with the annual report. Danger! Not everyone has zero in March – it depends on the amount of discounts.

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