Abuse proceedings against Bewag, EnBW, HEW and Veag on account of inappropriate charges for balancing energy

30.10.2001

Following complaints the Bundeskartellamt has initiated abuse proceedings against the electricity network operators Bewag AG, EnBW Transportnetze AG, Hamburgische Electricitäts-Werke AG (HEW) and VEAG Vereinigte Energiewerke AG (VEAG) on suspicion of their charging their competitors inappropriate and, in some cases, fictitious fees for balancing energy.

As energy cannot be stored the difference between the amount of electricity fed in and the actual amount of electricity used by the customer must be balanced out on a short-term basis (so-called balancing or regulating energy). As network operators, each one of the six German grid companies fulfils this task within its respective balancing area by disconnecting power plants or connecting additional plants at short notice. Each network operator has a unique position in the procurement and supply of this balancing energy. In contrast to the large grid companies, "Enron Capital & Resources Ltd., London (Enron)", "LichtBlick - die Zukunft der Energie GmbH, Hamburg (LichtBlick)" and other newcomers are in a less favourable position to balance an unplanned rise or fall in customer demand due to their smaller clientele and therefore require more balancing energy. They are likely to be heavily burdened with unreasonable fees charged for the balancing energy they require.

In the view of the Bundeskartellamt there is currently no understandable correlation between the actual procurement costs and the pricing system for balancing energy in the case of the four companies concerned. The balancing energy systems of these companies therefore clearly differ from the competition-based procurement and accounting systems which are used by RWE Net and will also be used by E.ON Netz as of December 2001, as well as in other countries’ balancing-energy markets (e.g. Sweden, Norway), and which were proposed in an expert opinion of the VKU (association of municipal enterprises) in September 2000.

In their initial comments these companies point out in particular that their accounting systems correspond to the regulations provided for in the Associations’ Agreement on electricity II (VV Strom II). The President of the Bundeskartellamt, Dr Böge, stated: “Conduct violating cartel law cannot be justified by an Associations’ Agreement. On the contrary, this reference to the Associations’ Agreement demonstrates that there is an urgent need to develop, within the context of the current modification of the Associations’ Agreement on electricity II (VV Strom II), basic rules on the fees charged for the supply of balancing energy in conformity with cartel law.

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