According to a legislative document published by the government, Reuters and Agerpres reported, the Czech industry minister proposed capping energy producers’ income from 70 to 230 euros per MWh, depending on the source.

With the scheme, the executive wants to get 15 billion Czech crowns ($613.25 million) into the budget in 2023, according to previous government projections.

On Monday, shares of the largest electricity company CEZ fell 2% after the offer was announced. The revenue cap is based on a deal agreed at EU level that withholds revenue from power producers above €180 per MWh to fund national compensation schemes for consumers hit by rising energy prices following Russia’s invasion of Ukraine.

Countries can change the cap in either direction, depending on the type of power plant, but overall the cap in these countries would bring more than €117 billion towards the EU level. The Czech Republic decided to keep 90% of the surplus income instead of the 100% allowed by EU rules.

The proposal lowers the overall cap of €180 per MWh, above which the state keeps revenue, to €70 for nuclear power plants operated by CEZ.

Details of the plan proposed by the Czech government

The ceiling for renewable energy sources will be 180 euros per MWh. For smaller lignite-fired power plants with a production of up to 140 MWh, the ceiling will be €170, and for larger ones – €230.

For biomass power plants, the marginal prices are 200 and 230 euros, depending on the type of fuel.

The new legislation proposes to establish income limits from December 1, 2022 until the end of 2023, that is, half a year longer than the EU regulation.

Separately, the lower house of the Czech parliament approved on Friday a 60% tax on the excess profits of energy companies and big banks, supporting the government’s plans in Prague to use the money to fund billions of euros in measures to cushion the impact of higher energy prices.

The executive expects to collect about 85 billion Czech crowns ($3.40 billion), or about 1.2 percent of GDP, from the tax in 2023 and a smaller level in 2024 and 2025.

The tax will apply to profits that exceed 120% of the average level recorded in the period 2018-2021 and will be applied in addition to the 19% income tax. The tax will apply from 2023, for three years, but the legislation must also be approved by the Senate.