Should Lower Inflation

Electricity Giant Raises Price for “Austria Rate”

The government wanted to guarantee low electricity prices with the “Austria Tariff,” but now the price is being raised.(Bild: Pressefoto Scharinger/Daniel Scharinger)

The partially state-owned energy provider Verbund is raising the price of its “Austria Tariff.” Effective immediately, new contracts will have a guaranteed electricity price of 10 cents (excl. VAT) (= 12 cents including sales tax) per kilowatt-hour in the first year. Previously, this rate was 9.5 cents net. However, not all customers are affected...

The Austria Tariff was presented by the federal government in January 2026 as a key tool for combating inflation. At the time, Federal Chancellor Christian Stocker described affordable energy prices as “one of the decisive issues for the future of our country, an affordable standard of living, and prosperity in our nation.” Verbund, a majority state-owned company, committed to offering an electricity rate below ten cents net per kilowatt-hour—a promise that was fulfilled in February 2026 with a starting price of 9.5 cents.

The new, slightly more expensive rate—like the old one—is aimed at households and businesses, can be signed up for online, and applies for the first year with a twelve-month contract term. Starting in the second year, the regular rate of 15 cents net (= 18 cents including sales tax) applies—the 5-cent discount is then no longer available.

Why the increase?
Verbund CEO Michael Strugl attributes the move to the persistently challenging situation on international energy markets. Geopolitical tensions—particularly the conflict in the Middle East—have recently led to renewed price increases. “As a responsible company, we continuously monitor and assess the market situation,” the group’s press release states.

Chancellor Christian Stocker pushed for the introduction of an “Austria tariff” at the beginning of the year.(Bild: Imre Antal)

In fact, the cost of procuring electricity has risen again recently. In light of this development, Verbund can no longer afford the 9.5-cent rate in its current form. The half-cent increase is moderate compared to market fluctuations.

What does this mean for customers?
The most important information for consumers: Nothing changes for existing customers on the “Austria Tariff.” Those who have already signed up for the tariff will retain their 9.5 cents net for the agreed 12-month contract term. The new terms apply exclusively to new contracts starting immediately.

Verbund CEO Michael Strugl is responding to the difficult situation on the international energy markets.(Bild: APA/HELMUT FOHRINGER)

Ten cents is still a good deal
Even after the increase, the “Österreich” tariff remains one of the most affordable offers on the Austrian electricity market. A comparison with the tariffs of regional energy providers shows that most providers charge more.

According to E-Control, the cheapest rate currently available on the market (excluding new-customer discounts) is about 9.1 cents net. The “Österreich” rate is thus only slightly above the absolute market minimum—and it comes with a 12-month price guarantee.

A Tariff with a Political History
From the very beginning, the “Österreich” tariff was also a political project. The federal government saw it as a way to help curb inflation, which at times was twice as high in Austria as the EU average. Chancellor Stocker and Minister of Economic Affairs Hattmannsdorfer (both ÖVP) praised Verbund at the January presentation for taking on “responsibility” as a state-owned enterprise.

Criticism, however, was not long in coming: The Momentum Institute criticized the fact that the rate is valid for only one year and will then rise to 12.50 cents net. Verbund countered that the rate was designed as an introductory offer and that customers would be free to switch providers once the commitment period expires.

Tariff Has Stimulated Competition
The fact is: The “Österreich” rate has spurred competition in the domestic electricity market. Following Verbund’s announcement, EVN followed suit, and Energie Steiermark also announced price cuts. This is good news for consumers—even if Verbund has now had to raise the introductory price slightly.