Bundeskartellamt prohibits RWE Net from charging excessive electricity metering and billing prices

According to its President Ulf Böge, the Bundeskartellamt in Bonn has established in a model case that the fees for metering and billing services charged by the network company RWE Net AG, Dortmund, to its competitors for the supply of electricity to households and commercial users amounting to 32.00 Euro per year (€/year) for single tariff meters (single-phase alternating current), 36.00 €/year for single tariff meters (three-phase current) and 72.00 €/year for double-rate tariff meters are abusively excessive. As of now RWE Net may not charge third electricity suppliers such as for example the appellant LichtBlick GmbH more than 20.35 €/year for single-phase current single tariff meters (reduction of 36.4 per cent), 22.90 €/year for three-phase current single tariff meters (- 36.4 per cent) and 37.41 €/year for dual tariff meters (- 48 per cent).

This decision affects the markets for network-related metering and billing services (purchase, installation and maintenance of meters, commercial services such as meter-reading, collection). These markets are to be separated from the market for the pure use of electricity networks. Service businesses which do not operate as electricity providers could also offer these services, a possibility which is, however, rejected by electricity providers. Excessive metering and billing prices considerably impede new suppliers. The metering and billing fees as well as fees for network use which are payable to the network operator and on which competitors have no any influence amount to more than 75 per cent of the price charged to final customers in the area supplied by RWE Net. A substantial proportion of up to 19 per cent of this cost item is accounted for by the fixed costs of metering and billing.

In comparison with the other major electricity providers RWE Net’s metering and billing prices are among the highest in Germany. According to Böge, the Bundeskartellamt has established on the basis of the comparable market concept that the comparative company offers these metering and billing services at a considerably lower price. In contrast to network costs different metering and billing prices cannot be justified by structural differences in the supply areas (urban, rural).

In the opinion of the Bundeskartellamt RWE’s justification that its high prices did not even cover the (imputed) costs is irrelevant under the comparable market concept, especially since there is no indication of losses incurred by the cheaper comparative company. Instead there are considerable doubts as to whether RWE Net properly allocates the costs to network-related services and electricity distribution. According to the Bundeskartellamt the company has considerable room for manoeuvre as more than 50 per cent of its metering and billing services are provided by the distribution company RWE Plus on behalf of the network company RWE Net. It is also questionable whether RWE sufficiently passes on the rationalisation reserves resulting from the RWE/VEW merger and general technical and economic progress to network users in the form of lower prices.

The President of the Bundeskartellamt, Ulf Böge, considers the excessive metering and billing prices to be a considerable hindrance for newcomers wishing to provide household and commercial customers with electricity. Even five years after the liberalisation of the electricity market the competitors’ market share in RWE Net’s supply area still remains below 5 per cent. “By making the ruling on abusive practices immediately enforceable we intend to achieve a swift improvement in competition conditions for newcomers. Without immediate enforceability competition for household customers in particular, which has been weakened by more than 10 insolvencies and the exit of more than 20 companies from the market, would be severely damaged by excessive metering and billing prices. Companies wishing to enter the market would be deterred from doing so.”

Background:
The subject of these proceedings are the prices charged by RWE Net as distribution network operator in North Rhine-Westphalia and parts of Rhineland-Palatinate and Lower Saxony for network-related metering and billing services to suppliers of households and commercial customers such as the party indirectly concerned, LichtBlick GmbH, Hamburg. The proceedings are not aimed at the billing prices of the distributing company RWE Plus which have been approved by the electricity price supervising authority of North Rhine-Westphalia within the general electricity tariff framework. These prices not only include network-related metering and billing costs, but also the costs of the overall supply of electricity, from electricity procurement and network use to the distribution of electricity.