UPDATE 1-German government, states aim for deal on energy prices

Thu Feb 14, 2013 8:49am EST

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(Recasts after meeting between ministers and states)

BERLIN Feb 14 (Reuters) - Chancellor Angela Merkel's government and Germany's 16 federal states will try to agree in March on plans to limit energy price rises, Environment Minister Peter Altmaier said, providing the strongest sign yet that it might succeed in passing a law.

With an election less than eight months away, Merkel is keen to show voters she is trying to stem rises in household power bills, due mainly to a big rise in the surcharge imposed to fund her ambitious switch to renewables.

Altmaier last month outlined proposals to reform Germany's renewable energy law and curb hefty rises in household electricity bills, but they met opposition from his Free Democrat (FDP) coalition partners and even more from opposition parties.

Without their support to pass a law before the election, the plans are doomed.

After a meeting with ministers from the states, Altmaier, a

member of Merkel's conservatives, told reporters on Thursday, that a working group had been set up to try to come up with a joint proposal by the end of March.

"It has become clear that there is an interest among the federal states to discuss the possibilities for an agreement," Altmaier said, adding that reaching a deal would not be easy.

"After today, I am a good deal more optimistic that this goal can be achieved," he added.

The energy minister for the state of Rhineland Palatinate, a member of the Greens, said there was a chance of getting a "lowest common denominator" type of deal but said the plans outlined by the government were far off her own party's ideas.

The opposition Social Democrats (SPD) and Greens could block the law in the Bundesrat upper house.

Earlier, Altmaier had announced that he had agreed with the FDP Economy Minister on the measures - a significant step forward in his push to get a law drawn up and passed.

New plants, individual consumers and energy-intensive industry should contribute in equal measure to help limit the costs of the switch to renewable energy, Altmaier's spokesman said in a statement.

The envisaged measures would save 1.86 billion euros ($2.5 billion) for 2014, but no further details were provided.  With voters' bills in mind, Altmaier said last month he wanted to cap rises in subsidies to renewable power producers and suspend feed-in tariffs to new installations.

He had also said he wanted owners of existing renewable installations to contribute to an "energy solidarity tax" and to end exemptions for some energy-intensive firms from the surcharge paid by households.

Power and carbon traders are watching the plans closely. ($1 = 0.7442 euros) (Reporting by Markus Wacket; writing by Madeline Chambers; Editing by Jeremy Gaunt and Jane Baird)

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