Why do you pay 25 cents per kilowatt, despite signing contract for 12? How much dotations do you pay for green energy? What all the abbreviations in the yearly bill mean?
The way how electricity price is defined and charged is quite standard for Europe but may be difficult to understand for immigrants. Complicated combination of taxes and charges makes final payment quite different from what is advertised by energy providers.
General principles
As the most of house-related services, electricity is paid based on predicted average with yearly settlement according to actual consumption. This means, provider assumes your consumption to be same as previous year; for the first contract it's predicted based on family size, size of the apartment etc. Based on this, yearly price is calculated and you pay 1/12th every month. Same as heating, it's same amount every month regardless of seasonal deviations.
Then after a year they check real consumption, calculate resulting cost and you either pay the difference or get it reimbursed. "A year" is not necessarily a calendar year, in my current contract they count 1st April till 31st March.
Most providers allow to adjust monthly payments in some range. In the end, of course, you pay the same in total.
This may seem a bit strange to people coming from Ukraine like me, that instead of paying for real consumption you delay it till the next year. But this allows to cut the seasonal spikes for households and also avoids hassle with constantly changing monthly payments. Also for freaks like me it's much simpler to check the accounting once a year instead of every month.
Price structure
I created a small utility that calculates the price for you with all the details. Lets see in details.
Example below is for 2000 kWh consumption in 2026. Taxes and fees slightly change every year.
Everywhere below I wrote prices incl. VAT. If you check the sources, there you often see net price, don't forget to add 20%.
We begin with "provider costs" - this is cost of the energy you consume, e.g. cost of generation. As many services in Austria, you have price per consumption (for example 11.4 cents per kWh) and fixed monthly fee (4.79 EUR). Numbers are just an example of my current contract with Verbund. This results in 228 EUR based on consumption plus 57.48 EUR fixed cost: 285.48 EUR to provider.
According to Austrian law, you have a free choice of provider and an easy and free possibility to change (of course, subject to binding period). Therefore providers are competing with freely defined prices. You can compare prices and change provider on E-Control or Durchblicker.
Then there are network costs. Network company owms and operates physical cables and equipment in your area, therefore delivering energy that you buy from providers. Logically, there is a single network and a single company in every area, for example Wiener Netze in Vienna. Because this is a natural monopoly, price of the network services is prescribed by the law: Systemnutzungsentgelteverordnung
Again you have fixed and consumption part of the price. The fixed price for the network is called "Leistungspreis", meaning "price of power". Roughly it's the price you pay for having the connection to your house, and for keeping it operationa(even if you decide not to consume electricity). Price depends on maximum power of your connection. For a regular household it's "level 7, not measured": 57.60 EUR per year (4.8 a month).
In addition there is another fixed payment called "Entgelt für Messleistungen". This is a payment for measuring your consumption, 31.97 a year regardless of smart meters, manual check, whatever.
Your payment to the network for the actually delivered energy is again split in two parts: "Netznutzungsentgelt", payment for network usage, 8.88 cents per kWh; and "Netzverlustentgelt", payment for losses in the network, 0.84 cents per kWh. This results in 194.40 EUR for consumed 2000 kWh.
Therefore in total in our example you pay 283.97 EUR to the metwork
Next category is taxes, or as they are called here "Abgabe" - literally translated as "duty".
Firstly you pay 6% tax on all calculated above. "Gebrauchsabgabe Energie" is a 6% on provider costs (6% of 285.48 EIR is 17.13 EUR). "Gebrauchsabgabe Netz" is the same 6% for network (283.97 EUR), resulting in 17.04 EIR).
As it's not enough, you additionally pay "Energieabgabe", simply 1.8 cents per kWh (results in 70.17 EUR of taxes in my example ).
Of course government also suports "green energy". For transparency, duties for green energy are accounted separately from taxes, according to the "Erneuerbaren-Ausbau-Gesetz (EAG)", the law on expanding renewables.
EAG duties are mirroring network price model. You pay for "Netznutzung" (network usage, 0.8844 cents per kWh) and "Netzverlust" (network losses, 0.0708 cents per kWh). Then you pay "Leistung" (connected power, same principle as with the network, 5.63 EUR a year), and "Pauschale" (total fixed fee, 22.82 EUR a year) which can be considered similar to "measurement price".
No mistake, these numbers are really relatively low, resulting with 47.56 EUR of support for renewables.
Summary
In our example we get total cost of electricity: 687.18 EUR, consisting of 25.14 EUR/kWh and 15.36 EUR fixed monthly.
Interestingly, 13.06 EUR per kWh and 10.28 EUR/month are predefined by law and you can't influence them. Your contract woth provider defines just a (smaller) portion oc the electricity cost.
Nevertheless, it does impact your wallet.
My hint: couple of months before the end of binding period check with your provider directly. Most providers can offer additional loyalty discount with the next binding period. This also works with everything else (like internet, mobile). No sense in staying "unbound" after the end of binding period, it's cheaper to have new binding. Or found a provider without binding from the beginning, if it's important for you.
I hope you found thos blog helpful. Will be glad to see your feedback in the comments.