Austria’s New Electricity Act Balancing risk and competition: key changes for suppliers and producers (2/3)

Austria’s energy landscape is on the verge of a significant transformation: On December 11, 2025, the Austrian Parliament passed the 'Cheaper Electricity Act', which (also) includes a revised version of the new Electricity Act (Elektrizitätswirtschaftsgesetz – ElWG). The ElWG is set to replace the outdated Electricity Act 2010 and constitutes a strategic shift in the regulatory framework of the Austrian energy market. It introduces a modern regulatory framework designed to foster a competitive, consumer-centric, and decarbonized energy market. The ElWG will have a significant impact on grid operators (Netzbetreiber), producers (Stromerzeuger) and suppliers (Lieferanten). It will also provide new flexibility mechanisms. This blog post, the second in a three-part series, focuses on the key implications of the ElWG for suppliers and producers. 

Enhanced customer rights: a new paradigm for suppliers 

The ElWG considerably improves customer rights. This has important implications for suppliers, who must adapt to a more transparent and competitive market environment. 

While the Electricity Act 2010 provided for rules on changes in terms and prices, a series of rulings by the Austrian Supreme Court invalidated suppliers’ price adjustment clauses, creating legal and commercial uncertainty for the entire sector. The ElWG attempts to resolve this issue by introducing, for the first time, a statutory right for suppliers to unilaterally amend general supply conditions and energy prices. However, this new legal right comes with strict conditions: At least one month before the change takes effect, customers must be informed transparently and comprehensibly, with clear information on the reason, prerequisites, scope, and effective date of the adjustment. Customers must also be informed of their right to object to the changes. If they exercise this right, the contract will be terminated at the end of the month following a three-month period after the price change takes effect, unless they switch to a new supplier earlier. This establishes a de facto 'cooling-off' period, during which the previous terms of the contract remain in place. For changes in prices affecting household customers and small businesses, additional rules apply: (i) price changes are only permitted for permanent contracts; (ii) price increases must be appropriate to the cause, and must not lead to a significant increase in the profit margin of the supplier; (iii) if the cause for a price increase ceases to exist, the supplier is obliged to implement a corresponding price reduction; (iv) price increases can take effect no earlier than six months after the start of the contract or the implementation of the previous price change; and (v) price changes are only permissible if a significant change in the profit margin relative to the price would otherwise occur. 

The ElWG also restricts suppliers’ freedom by requiring them to diversify their product designs: Suppliers with more than 25,000 metering points have to offer both dynamic energy price contracts and fixed-price contracts. The ElWG imposes strict pre-contractual duties regarding opportunities, costs and risks for dynamic contracts. 

The ElWG also makes it easier for customers to switch suppliers. Although the notice period for terminating a contract remains unchanged, the technical switching time is reduced from three weeks to just 24 hours, with effect from April 1, 2026. Switching suppliers is further facilitated by the strengthening of the regulatory authority’s comparison tool (Tarifkalkulator): The ElWG requires suppliers to report on their current standard products, as well as on those used by at least 5% of their household and small business customers. Suppliers must also provide a monthly comparison product. 

Transparency for customers is increased by enhanced requirements for billing and pre-contractual information. Upon concluding a contract, suppliers must provide customers with a concise, easy-to-understand summary information sheet that contains legally defined minimum content. Suppliers are thus required to develop and maintain new standardized documents that must be integrated into all sales channels. Furthermore, invoices must now include a comparison of the customer’s own energy usage with that of an average customer in the same category. This allows customers to make more informed decisions about their energy usage. Suppliers must implement new data analysis and billing processes to generate these comparisons accurately. 

A new era of risk management: hedging obligations for suppliers 

In response to market turmoil and supplier insolvencies during the energy crisis, which exposed market vulnerabilities, the new ElWG introduces mandatory risk management obligations for suppliers. Suppliers are legally obliged to adopt and implement appropriate hedging strategies to limit economic risk arising from changes in wholesale electricity prices for contracts with customers. Suppliers must further take reasonable steps to limit the risk of supply disruptions. Although the design of each supplier’s risk management strategy is their responsibility, these strategies must be submitted to the regulatory authority on an annual basis for formal scrutiny.

The regulatory authority is granted extensive powers to monitor and enforce hedging obligations of suppliers. It can define standard test scenarios for wholesale market price changes via ordinance to stress-test the resilience of supplier hedging strategies under extreme market conditions. If the regulatory authority deems a supplier’s strategy insufficient, it can order adjustments via a formal decision. As a final enforcement measure, the regulatory authority can publish the names of non-compliant suppliers on its website as a form of 'naming and shaming'.

Beyond these regulatory sanctions, the new legal duty establishes a concrete standard of care for the management of supply companies. A failure to implement and properly document an appropriate hedging strategy could therefore not only trigger regulatory action but may also increase the risk of personal liability for managing directors and board members under corporate law in the event of insolvency. 

Rethinking grid connection fees: key changes for producers 

The ElWG fundamentally reforms the determination of grid fees, shifting power from the legislator to the regulatory authority, simplifying fee structure and creating new incentives for producers of renewable energy. 

Following the ECJ judgment C-718/18, which reinforced the autonomy of national regulatory authorities, the ElWG has transferred almost all responsibility for determining the grid fee calculation methodology to E-Control. For market participants, this shift from predictable, albeit rigid, legislation to a more dynamic regulatory regime has profound strategic implications. Long-term investment decisions, which once relied on stable statutory parameters, must now account for a higher degree of regulatory uncertainty, as the regulator can adapt the framework more swiftly via ordinances. 

The ElWG simplifies the fee structure: It introduces a single, consolidated grid connection fee (Netzanschlussentgelt), which replaces the previous system of separate grid access fees (Netzzutrittsengelt) and grid provision fees (Netzbereitstellungsengelt). 

Furthermore, the ElWG adjusts flat-rate amounts for the grid connection of renewable energy plants, which – as transitional provisions – shall apply until the E-Control issues provisions on grid connection fees by way of ordinance. Also, the ElWG introduces powerful new incentives: Plants of up to 15 kW are completely exempt from the grid connection fee. For renewable energy plants connected to the distribution grid via an existing connection, the grid connection fee, which only applies for plants exceeding 15 kW, is reduced by 85%. And, for power generation plants built at so-called “system-supportive” locations, the flat rate is reduced by 30%. 

Key implications for suppliers and producers: 

• Empowered customers create a more competitive supplier market: Enhanced transparency, the right to dynamic pricing, and simplified supplier switching will increase competitive pressure on suppliers. Suppliers also face higher administrative burdens as they must come up with new standardized documents and processes.
• Professionalization of supplier risk management: The mandatory hedging requirements transform risk management from a purely commercial activity into a legally enforceable duty. This forces suppliers not only to build internal expertise, but also to create auditable processes and documentation. 'Naming and shaming' significantly raises the reputational stakes, making compliance a priority at all levels and increasing management's potential liability.
• Incentives for smarter grid development: For producers, the new grid fee structure, particularly the 30% discount for system-supportive connections, creates a strong financial incentive to consider grid capacity in their site selection process, alongside factors like wind and sun availability. However, this incentive comes with a degree of regulatory uncertainty, as the precise criteria for what qualifies as a 'system-supportive location' will be defined by E-Control via ordinance.
• The rise of the regulator: The strengthened position of E-Control is relevant for both suppliers and producers. For producers, investment security for large-scale projects becomes more complex, as critical parameters like grid fees or the definition of system-supportive connections are now subject to regulatory discretion. Suppliers must anticipate regulatory stress-test scenarios, and the design of long-term products must factor in potential changes to the market framework. The strategic focus for all market players must evolve from merely interpreting statutes to actively monitoring and engaging with the regulator’s rule-making process.