After several weeks of discussions with energy companies, Dutch government on Wednesday afternoon announced cap rates for gas and electricity and confirmed that households in Netherlands will be entitled to a total of €380 in compensation to help cover rising bills in November and December.

Households in the Netherlands benefit from price capping and compensation

While there were plans announced on Prinsjesdag in Septembergovernment and energy companies it took several weeks to finalize exactly what the package of measures would look like.

The cap on energy prices will not come into effect until the new year, but facing increasing pressure from the opposition and the general public, the cabinet also confirmed that small consumers (ie. family and small businesses) will be entitled to €190 in compensation to help cover rising gas and electricity costs in November and December.

From January 1, 2023, households in the Netherlands will pay a maximum of €1.45 per cubic meter of gas and €0.40 per kilowatt-hour of electricity. The restriction will only apply to the first 1,200 cubic meters of gas and 2,900 kilowatt-hours of electricity used during the year. Consumption of any additional gas or electricity will be charged at the rates set by each energy company.

The limit is slightly lower than originally expected, and the second package of measures is also being finalized to support businesses that use relatively large amounts of energy (such as bakeries and butchers). This means the package of measures is costing much more than was predicted at Prinsjesdag, with the Dutch government spending €23.5 billion on the scheme.

The Dutch climate minister emphasizes that the restriction is only temporary

“More and more people and companies are suffering from unprecedentedly high energy prices,” Climate Minister Rob Jetten said. “With price caps, we’re helping to reduce the burden and give people more confidence.” While Jetten was pleased that rates were lower than planned, he stressed that the measures were only temporary.

Consumer associations were pleased to hear the government was putting more money into the scheme, but highlighted the fact that many households would continue to struggle in winter. “People who sometimes out of necessity use more energy than average because they are sick or have a large family are still paying the ultimate price for some of their energy use,” Aryan Vligenthart, director of the National Institute for Information Technology family finances. (Nibud), short story NOS.

Businesses have also raised concerns about the lack of information available about the scheme for energy-intensive businesses. It will not come into effect until April 1, 2023, but will be retroactive to November 1. It is not yet clear which businesses will benefit from the scheme and what the price cap rates will be.

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