Swiss parliament approves bailout for electricity providers

The Swiss tax payer will be lender of last resort if electricity providers run into financial difficulties. Keystone/ Valentin Flauraud

Companies that produce Switzerland’s electricity will have access to CHF10 billion ($10.5 billion) in emergency state credit should they run into financial difficulty in the coming months.

The measure was approved by the House of Representatives on Tuesday, following a similar decision by the other parliamentary chamber, the Senate.

Electricity provider Axpo has already been promised a CHF4 billion credit line by the government as energy prices surge throughout Europe.

The Federal Energy Office is concerned that energy companies are facing unprecedented price volatility as Russia restricts gas to Europe and France’s creaking nuclear power network struggles to maintain output.

“We have no time to lose, we have to be prepared for a worst-case scenario,” Energy Minister Simonetta Sommaruga had said when presenting the bailout proposal in April.

Swiss households are expecting an average 27% hike in electricity bills as providers pass on the costs to consumers. Parliament has decided companies like Axpo need extra protection to avoid bankruptcies affecting the critical energy sector.

The rescue package was met with some opposition in parliament, particularly from the right-wing People’s Party. Some parliamentarians criticised energy companies for failing to do their homework and for extracting excessive profits.

But the majority voted in favour of protecting the electricity network with emergency loans with the state acting as lender of last resort.