German economy, environment ministers agree to curb energy price rises, pre-election

Reuters

BERLIN (Reuters) - Germany's environment and economy ministers, from different parties in Chancellor Angela Merkel's centre-right coalition, have agreed on measures to curb rises in energy prices before the national election in September.

The deal, announced by Environment Minister Peter Altmaier's spokesman on Thursday, will make it easier for the government to draw up legislation to reform the renewable energy law.

New plants, individual consumers and energy-intensive industry should contribute in equal measure to a dampening of the costs of the switch to renewable energy sources, the spokesman said in a statement.

He said the envisaged measures would save to 1.86 billion euros (1.6 billion pounds) for 2014.

It was unclear if opposition parties, who could block legislation in the Bundesrat upper house, will agree. Ministers from Germany's 16 federal states meet for talks on the measures with Altmaier on Thursday.

With an election less than eight months away, Merkel is keen to show voters she is trying to stem rises in household power bills which have soared due mainly to a big rise in the surcharge imposed to fund her ambitious switch to renewables.   In a bid to curb increases in consumers' bills, Altmaier said last month he wanted to cap rises in subsidies to renewable power producers and suspend feed-in tariffs to new installations.

He had also said he wanted owners of existing renewable installations to contribute to an "energy solidarity tax" and to end exemptions for some energy intensive firms from the surcharge paid by households.

The plans, being watched closely by power and carbon traders, met fierce criticism from some in the Free Democrats (FDP), of which Economy Minister Philipp Roesler is head, as well as from the opposition Social Democrats (SPD) and Greens.

(Reporting by Madeline Chambers. Editing by Jeremy Gaunt.)

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