AFCA statement on ElWG 2025
The Austrian Federal Competition Authority (AFCA) submitted a comprehensive statement on the new draft bills. The statement takes account of the final report of AFCA and E-Control’s investigation into the energy sector (Energy Task Force).
Overall, the ElWG draft addresses many of the problem areas identified by the Energy Task Force, which the two institutions welcome. The AFCA does however still see some room for improvement, pointing to additional key recommendations made by the Energy Task Force that have not been addressed so far and are not reflected in the current legislative package.
In line with the Energy Task Force’s final report, the AFCA statement includes the following recommendations:
Recommendation 1: Transparent tariffs and products
Positive points:
The new transparency rules require suppliers to disclose their reasons for price changes, such as higher procurement costs or new taxes. Sufficient transparency ensures that consumers can make better decisions and use their special termination rights in the event of price rises that appear to be disproportionate. This makes it harder for utility companies to make detrimental contract changes, which in turn promotes fair competition.
Another positive point is that utilities are required to actively inform their customers about the possibility of switching suppliers every year. This might encourage end customers to switch to other suppliers.
The AFCA also approves of E-Control monitoring tariff change clauses. However, the AFCA recommends having this rule apply to energy suppliers with 20 000 supply points. The current threshold is 50 000 supply points, which excludes significant public utilities.
In addition, it is recommended that energy suppliers should also be obliged to disclose their profit margins during price monitoring.
Points viewed critically by the AFCA:
The planned right to change prices based directly on the law does not have any advantages over the previous contractual solution, since it dispenses with the checking of clauses and does not improve consumer rights.
The legal consequence as stipulated in § 21 para. 5 ElWG, according to which an inappropriate rate change can be replaced with an appropriate rate change, is categorically rejected. This regulation does not provide any incentive for suppliers to impose legally complaint rate changes, leading to detrimental contracts for end customers in the absence of any sanctions.
The AFCA also recommends monthly billing (with the possibility to opt for an annual bill), as had still been included in the 2024 ElWG draft, as standard for all supply contracts (and not only those with dynamic energy prices).
Recommendation 2: Disclosure and control
The Task Force recommended that procurement strategies and margins should have to be disclosed in times of crisis so that the factors responsible for price hikes are clearly demonstrated. It is positive that energy suppliers will now be required, as part of risk management checks, to submit any supply commitments, price agreements and guarantees, as well as information about energy procurement at wholesale level, to E-Control.
Equally positive is that E-Control recommendations on energy suppliers’ standard products should generally be forwarded to the competition regulator, and specifically if indications of price fixing, distortive product offers or similar practices are detected during monitoring. The AFCA considers it necessary to expand the exchange of information in terms of content, and not just on an annual but on a specific basis.
Recommendation 3: Legal security
The Energy Task Force recommended adopting the ElWG quickly and providing legal protection for crisis situations too. The AFCA welcomes the fact that the new and extensive ElWG draft is already under review and hopes that it will be adopted without delay.
Crisis-related protection should follow soon.
Recommendation 4: Limitation of cross-holdings
The AFCA and E-Control criticised cross-holdings among energy suppliers, since they create an intensive structural interdependence of market players, which impedes competition. This also restricts price competition and facilitates coordination among suppliers. It is therefore necessary to work towards a general reduction or dissolution of cross-holdings, and to prevent further interdependence.
The issue of cross-holdings is not covered in this draft bill. As a first step, the AFCA recommends the introduction of mandatory special merger control for all new or restructured shareholdings in the energy sector, including below the current thresholds for merger notifications.
Recommendation 5: Lessons learned
The AFCA recommends learning from the crisis, specifically providing security for consumers without a contract, as well as ensuring that every consumer will continue to be supplied with energy at market-based terms after contract termination.
The AFCA wishes to reiterate that the draft bill does not provide for crisis mechanisms as in other European countries.
In relation to times of crisis, the AFCA also highlights another important aspect that has not been included in the ElWG draft, namely the fact that the Federal Act to mitigate the consequences of the crisis and improve market conditions in the case of dominant energy suppliers will expire on 31 December 2027 and should be extended.
For more details and further recommendations on default supply and civilian energy projects, please refer to the AFCA statement (available in German).