Federal Councilor Simonetta Sommaruga would like to provide Axpo, BKW and Alpiq with up to 10 billion francs in an emergency. But this triggers defensive reflexes in the affected companies. BKW warns of an unprecedented expansion of state intervention.
Federal Councilor Simonetta Sommaruga would like to set up a rescue package for the electricity industry – but conservative politicians and affected companies are skeptical.
It is a nightmare scenario that is no longer unthinkable: Russia stops supplying gas, and there are shock-like price swings on the energy markets. The Swiss electricity companies are suddenly no longer able to deposit their trading transactions with the necessary collateral. They therefore find themselves in a liquidity bottleneck, which could jeopardize the security of supply.
Federal Councilor Simonetta Sommaruga wants to be prepared for this eventuality. She would like to put up a rescue package for the systemically important electricity companies if a wildfire breaks out in Europe. The federal government should inject up to CHF 10 billion to prevent a system-critical failure of one or more electricity suppliers.
But as it now turns out, the SP magistrate’s protective shield triggers strong defensive reflexes in at least two of the three companies affected – BKW and Axpo. “The rescue package goes far beyond the target,” explains the Bernese energy company BKW in a statement. The aim should be to ensure security of supply even in extraordinary situations. The Federal Council’s rescue package is the wrong instrument for this because it aims to support individual companies with liquidity alone. In addition, the unprecedented expansion of state intervention is diametrically opposed to the basic principles of the Swiss economic system and the electricity industry.
Similar signals are also coming from the country’s largest electricity company, Axpo. There, too, the greatest difficulties are being expressed with the concept of the rescue package. However, the company has not yet issued an official statement. Therefore it does not want to express itself publicly.
Power companies have no choice
Above all, the power companies are bothered by the fact that they are being forced under the rescue package, regardless of their financial situation. They are automatically restricted in their business activities and have to hand over business-critical information to the authorities. They have no choice: within six months of the decree coming into force, they must enter into an agreement with the federal government on the modalities of the loan. If the contract is not concluded in time, it will be ordered by the federal government – on significantly worse terms.
If the companies come under the new regime, they first have to pay a lump sum, regardless of whether they ever take out a federal loan. This should be between 10 and 15 million Swiss francs. From the point of view of the federal government, the lump sum is justified. In this way, the costs of providing liquidity and the personnel and material costs in administration could be passed on to the company, at least in part.
Even if the rescue package never has to be deployed, companies are obliged to provide the federal authorities with information about their commercial transactions, credit lines and risk positions. And if there really is an extreme case that the federal government has to help a cash-strapped company with federal funds, it is given the power to control and have a say in the business of the company concerned. According to the company, this is completely disproportionate.
The interest that companies have to pay when granting a loan is also extremely steep. In addition to the market interest rate, the federal government demands a risk premium of 20 percent of the loan amount – or even 30 percent if the contract cannot be concluded on time. For example, if the federal government grants a company a loan of CHF 2 billion, it would have to repay the federal government an additional billion francs after two years – or even more.
Bourgeois politicians are skeptical
Criticism of the rescue package has been voiced not only by the companies affected, but also by middle-class politicians. “The federal government obliges systemically important energy companies to place themselves under its control in the event of extraordinary market developments,” says Bernese FDP National Councilor Christian Wasserfallen. This is leading to a creeping nationalization of the energy companies at the federal level. And that has to be prevented.
Central politician Nicolo Paganini thinks it is right that participation in the bailout fund is mandatory for systemically important electricity companies. Otherwise, in the event of a conflagration on the European energy markets, those systemically important electricity companies that had not previously paid the provision fee would probably also have to be rescued.
However, the Eastern Swiss National Council does not see the federal government as responsible, but rather the cantons and, in some cases, the large cities. As the majority owner of the electricity companies, it is primarily their task to set up a security construct for emergencies. “After all, the cantons and municipalities have also made a lot of money from the electricity business for decades.”
Cantons on hold
The cantons themselves are meanwhile going to the diving station. It is not yet possible to comment publicly, according to the conference of cantonal energy directors. But have the cantons that own Axpo, Alpiq and BKW already taken the necessary precautions themselves to ensure that the companies have sufficient liquidity if necessary? The announcements by the cantons of Aargau and Zurich, which are Axpo’s largest minority shareholders, raise doubts.
It is primarily up to the company management and the board of directors to take precautions to ensure business activities, emphasizes Peter Buri, spokesman for the government of the canton of Aargau. If necessary, the canton will fulfill its responsibility as an Axpo shareholder. And the Zurich energy director Martin Neukom only explained to SRF that the exchange at the top level had been intensified because of the effects of the market turmoil on Axpo since the outbreak of the war.
Meanwhile, voices from the left-wing camp are already complaining that the Federal Council’s regulations for companies that go under the rescue package are not sufficient. The SP national councilor Gabriela Suter demands that the electricity companies concerned should also be obliged to invest more in the expansion of renewable energies domestically. They have done far too little in the past.
Federal Councilor Sommaruga would like to push the urgent law, which is currently being discussed, through the councils by the summer. This will not be a walk.