At its meeting on 12 February 2025, the Federal Council finally approved its proposed amendment to the method of calculating the WACC (Weighted Average Cost of Capital, or "coût moyen pondéré du capital" in French).
In consultation for several months in 2024, the amendment to the Electricity Supply Ordinance raised numerous concerns among electricity producers and suppliers in Switzerland. Its main objective was to revise the method of calculating the WACC (Weighted Average Cost of Capital, or « coût moyen pondéré du capital » in French).
At its meeting on 12 February 2025, the Federal Council finally approved its amendment project, arguing in particular that it should allow "savings of 124 million francs for electricity consumers from 2026." Thanks to a new calculation method, when rates are low, the WACC should decrease more sharply than before.
To reassure the sector, the government says in a press release that the WACC should no longer fluctuate excessively in periods of high or low rates. It says this should guarantee "planning security for investors, even during phases of extraordinary rates."
In November, Christian Petit sounded the alarm: "Let us not make a short-term bet to simply ease our customers' bills a little by reducing investments that are fundamental for the future," said the former CEO of Romande Energie at the time. He warned that a change in the formula for calculating the WACC could force the sector to invest differently.
"The current WACC method, which governs the calculation of the return on capital, has proven itself. Introduced in 2014, it guarantees legal certainty and investment security," says the Swiss Association of Electricity Companies (AES).
"We do not invest only in the power grid, but also in generation capacity. If the returns on production facilities became sustainably more attractive than those of the grids, we could be inclined to favour those investments, with the risk of underinvesting in electrical infrastructure," he warned, adding that this situation would represent "a dangerous trade-off for Switzerland's security."
Bern's decision thus provoked a wave of anger among electricity producers and suppliers in Switzerland. The Swiss Association of Electricity Companies (AES) expressed its regret at a decision it considers motivated solely by political considerations, rather than by objective and concrete elements. "The current WACC method, which governs the calculation of the return on capital, has proven itself. Introduced in 2014, it guarantees legal certainty and investment security," reads a position paper.
The attractiveness of the WACC, whose rate evolves according to the price of electrons available on the markets, is considered crucial to preserve the appeal of investments in the grid. However, one thing is now certain: investments will need to be increased in order to develop and adapt the Swiss electricity system to the new realities of the market, notably in connection with the rise of renewable energies.
Political will therefore seems clearly to be going against the tide, responding notably to pressures exerted by consumer protection federations. For years, the Fédération romande des consommateurs (FRC), allied with Konsumentenschutz and ACSI, has been fighting for such a reduction. "The calculation method has led in recent years to a systematic overestimation of the WACC rate," it says.
The AES warns against misleading and counterproductive effects: "Investments will be lacking, and one should also expect a shift of capital abroad or to other sectors, which would result, ultimately, in higher financing costs and, consequently, more expensive infrastructure," the association explains.
The association goes even further by speaking of a "peril, not only for the energy and climate strategy, but also, and above all, for Switzerland's security of supply." For his part, Christian Petit warned, at the end of last year, that a scenario should be avoided in which "the grid would become the poor relation of the system."
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