UPDATE - EU energy ministers agree on emergency measures

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By Agnes Szucs

BRUSSELS (AA) – EU energy ministers agreed on Friday on taxing the revenues of energy companies and reducing energy consumption during peak hours.

“Ministers reached a political agreement on measures to mitigate high electricity prices,” the Czech government, assuming the turning presidency of the Council of EU, announced on its official Twitter account.

The agreement involves mandatory reduction of electricity demand during peak hours, introduces solidarity contribution for fossil fuel producers, and caps revenues of companies that produce electricity at low costs, such as nuclear or renewable energy producers.

According to the new rules, EU countries will commit to a mandatory 5% reduction of their electricity consumption during peak hours and an overall target of a 10% decrease between December 2022 and the end of March 2023.

The EU will also “cap revenues at 180 euros/MWh for electricity generators” that “have made unexpectedly large financial gains over the past months, without their operational costs increasing,” the Council said in a press statement.

The decision touches on the so-called inframarginal technologies, such as renewables, nuclear, and lignite, and is applicable until June 30, 2023.

Also, fossil fuel producers will have to pay a solidarity contribution on their taxable profit that exceeds a 20% increase of the average yearly taxable profits since 2018.

According to the European Commission’s calculations, the levies will bring in a total of €140 billion ($136.6 billion) revenue that will be distributed among EU member states to support vulnerable households and businesses.

The decision has yet to be officially adopted after the political consensus.