Middle National Counselor and Entrepreneur Fabio Regazzi (60) at the Roller Shutter Production Hall in Gordola. In 2023, the Ticino native is expected to pay one million francs for electricity for his medium-sized business.
The blow is deep. It’s been two weeks since the letter from the Société Elettrica Sopracenerina (SES) was hoisted in the house. But the entrepreneur at Gordola TI still hasn’t digested the message. “When I opened the envelope and read the estimate, I thought a typo had cracked,” says Fabio Regazzi. “My electricity provider wants about a million Swiss francs next year. This year, the cost of electricity was just 60,000 francs. Even if you put a gun to my chest, I still can’t and don’t want to pay a million Am.”
A call to the electricity provider SES confirms the incredible price increase: the price has risen 1600 percent on the open market! “It would be like suddenly a liter of petrol at a gas station costs 25 francs,” says Regazzi.
Entrepreneurs caught in the trap of free market
Regazzi’s company employs 140 people and has annual sales of approximately 25 million Swiss francs. Electricity is used for production, lighting, heating, paint shops and offices. “If I do not find a solution, I will have to cut jobs. We have already raised prices because of the increased cost of materials. More is not possible,” complains the politician. «But where do I get cheap electricity? Should? Most of the electricity providers don’t even offer any now.”
Fabio Regazzi fell into the trap of the free market. In 2009, the electricity market was liberalized for companies with an annual consumption of more than 100,000 kWh. «Our company has been a customer of SES for as long as it has existed, that is, for a good 75 years. The so-called free market offering was tempting, so we jumped in. But I have never changed suppliers or looked internationally for lower prices. I didn’t know something like this could threaten us.”
“There is a risk of bankruptcy and job cuts”
Regazzi always signed multi-year contracts. “Now the contract is over and I got an offer,” says Ticino. He had already inquired in March, “Since the price was already five times higher than the previous year. I then decided to wait and see, assuming that the prices would come down again.” But that’s not the case. The opposite is true, instead prices are astronomically high.
As president of the Swiss Trade Association (SGV), Fabio Regazzi is also deeply concerned. «The price shock affects many small and medium-sized businesses such as restaurants and bakeries. They cannot pay the bill. There is a risk of bankruptcy and job loss,” says Regazzi. “Now the politicians have to act quickly.”
Hotelier Fernando Bruner also surprised
In Ticino, 40 SMEs received a similar estimate from the SES. The SES confirms that the open market has increased prices by 15 to 20 over these months. A good 90 percent of customers signed new contracts in good time, with ten percent now having to bite the bullet. Anyone who has left tariff-regulated basic service is not allowed to return. This was decided by the Federal Electricity Commission (LCom). On the other hand, all companies that have never bought electricity from the free market and all private households that have never been liberalized are safe. Electricity will be charged as per the tariff and the price was increased by only 18 per cent.
Fernando Brunner (73) regrets stepping into the free market today. The Ticino native owns four hotels and one restaurant in Locarno Ti and Lugano Ti. So far, the cost of electricity is about 200,000 francs per year. “Now more than 900,000 francs are being demanded,” Brunner says. “30 per cent price hike would have been shouldered. But we don’t manage about 500 percent. We have to increase room rates by 50 francs per night. No guest would do that.” Like Fabio Regazzi, the hotelier is shocked and at a loss.
They both already know one thing: they won’t be signing new contracts.