Energy price cap could be lower if prices fall; EU denies blocking measure

The government may lower its proposed price cap if the gas and electricity prices have fallen by the time the cap is introduced. Currently, the Cabinet is still capping it at 1,200 cubic meters of gas and 2,400-kilowatt hours of electricity. Up to those limits, citizens will pay the lower rates that applied before Russia invaded Ukraine. But the government could lower those limits, Prime Minister Mark Rutte said in response to questions to parliament. Rutte also said that the European Commission did block a price ceiling on energy bills in response to surprised reactions from Brussels that the Netherlands says it didn’t take this measure sooner due to EU rules.

Rutte said that the gas market’s development is uncertain. This is partly because the supply to Europe varies. For example, the demand for liquefied gas is also growing in Asia, forcing Europe to pay more. Hydroelectric power stations in Europe also generate less electricity due to the drought, so gas has to be fired for electricity production. There is also uncertainty about where gas will come from next year, now that Europe will largely stop using Russian gas.

In parliament, parties are arguing for making the cap wider so that people in, for example, older medium-sized homes also get sufficient support. According to PvdA leader Attje Kuiken, the current arrangement does not help those citizens. “If you’re going to do it, do it right.” But Rutte pointed to government finances, which he also wants to keep “sustainable” in the longer term.

Independent MP Pieter Omtzigt and Caroline van der Plas (BBB) wanted clarification on the cap’s consequences for people connected to a heat network or with a heat pump. That is about 900,000 households. Rutte did not answer those questions, only saying they’ll be taken into account “as much as possible.” For now, working out a price cap for small and medium-sized enterprises (SMEs) has “the highest priority,” the Prime Minister said.

There was also confusion about the Cabinet’s statement that the European Commission prevented them from implementing a price cap sooner. A spokesperson for European Commission vice-president Frans Timmermans told BNR that the Netherlands never asked to set a price ceiling. The European Commission suggested the measure in March but then did set stricter requirements than now. A European directive, signed by Energy Minister Rob Jetten in March, states that the government can intervene under certain conditions to help vulnerable households.

Rutte told parliament that the European Commission did stop a price ceiling on energy bills. “As we interpret Europe,” until this month, there were rules that “did not leave room for generic, untargeted compensation,” Rutte said. The draft agreements made in Europe last week were a “game changer” that allowed the price cap.

The Cabinet is not completely “flawless,” Rutte admitted. “What I blame myself for is that I did not say before the European Council: shouldn’t we allow more easing on this point?”

The Tweede Kamer, the lower house of the Dutch parliament, is on the second day of the annual marathon debate on the government’s budget and plans for the upcoming year. After causing a commotion in parliament on Wednesday, FvD leader Thierry Baudet skipped Thursday’s debate because his wife is about to give birth, his spokesperson said.

On Wednesday, Baudet cited theories about the “destruction” of society and international collusion against “real people” and praised the Russian government as an example of “a strong sense of national identity, with a realistic approach to foreign policy and a virile, masculine leader who stands out against the effeminate, often sexually deviant politicians of the West.” When he said that a department of Oxford University where Finance Minister Sigrid Kaag studied is “in fact little more than a training institute for Western secret services,” the Cabinet walked out of the Kamer.