Italy Takes Steps to Lower Energy Bills for Families and Businesses

Italy's government approved a new plan on Monday to help families and businesses pay lower electricity bills starting in January. Energy Minister Gilberto Pichetto Fratin announced the measures after the country's cabinet gave its approval. The plan came as rising gas prices made electricity more expensive across Italy. Leaders hoped the move would ease financial pressure on people ahead of national elections scheduled for next year.

Italy relies on natural gas more than almost any other country in Europe. In fact, natural gas is used to produce nearly half of all the electricity in Italy. That is the highest share in the entire European Union. Because of this heavy dependence, when gas prices rise, Italian electricity bills quickly go up too.

Under the new plan, the government will pay back part of the cost of the natural gas used to generate electricity. This arrangement was agreed upon with the European Commission, the governing body of the European Union, last month. The goal is to bring down the average electricity price by about €15, or roughly $16.80, for every megawatt-hour of energy used. A megawatt-hour is a standard unit used to measure large amounts of electricity.

Not everyone was happy with the plan, however. A climate research group called ECCO said the measures would only slightly reduce household bills. The group also warned that the plan would keep Italy stuck using fossil fuels like natural gas instead of moving toward cleaner energy sources. Energy producers were also critical, saying the government was making decisions that hurt their businesses.

Gas prices in Europe have been high and unstable recently. Low storage levels across the continent and conflict in the Middle East pushed the price of natural gas to over €104 per megawatt-hour last month. By Monday, prices had fallen back to around €82 per megawatt-hour, but that is still very high by historical standards.

To pay for the new plan, the government said it would raise certain fees on some households and companies. Energy producers will also be asked to help cover some of the costs. Additionally, Italy plans to raise a special corporate tax on energy companies by three percentage points. This tax increase is expected to bring in about €734 million in 2027 and around €2.5 billion over the next three years.

Italy's main business group, Confindustria, supported the plan. It said it hoped the measures would help companies that use large amounts of electricity manage their high power bills. Prime Minister Giorgia Meloni has been under growing pressure from protests over the rising cost of living, making this a key issue for her government heading into the election season.