Austria plans to partly reimburse household power bills

VIENNA (Reuters) - Austria's conservative-led government on Wednesday outlined a plan to help households cope with soaring energy bills by partly reimbursing costs beyond what it called the pre-crisis level.

The plan, which must still be approved by parliament, would provide the average household with around 500 euros ($495) in aid per year until June 2024 and cost roughly 3-4 billion euros, the energy ministry said in a statement.

Extra aid would be available for the poorest households and those with more than three people, it added.

"In the fight against the rising costs of living we are at the front of the pack," Finance Minister Magnus Brunner told a news conference of the plan, tentatively due to start in December.

Austria would automatically reimburse up to 30 cents ($0.30) per kilowatt hour (KWh) that households are charged beyond 10 cents per KWh, up to an annual limit of 2,900 KWh, the energy ministry said, adding that 2,900 KWh was 80% of the average household's use.

Power market regulator e-Control, however, has told news agency APA that roughly half of Austria's households use less than 2,500 KWh a year.

However, the economist whose idea the plan is based on criticised the plan because the subsidised amount is based on a single national average rather than tailored to each household, meaning it will be simply too high or too low for many and thus provides less encouragement to reduce power consumption.

"There are no incentives to save (energy) anymore," Gabriel Felbermayr, head of economic think-tank Wifo that produces forecasts used by the government, told broadcaster ORF.

The opposition Social Democrats said the measure was better than nothing but was being taken too late. It called for a similar measure on gas prices.

($1 = 1.0102 euros)

(Reporting by Francois Murphy; editing by Jason Neely and Andrew Cawthorne)