Scientific expertise largely confirms Bundeskartellamt’s criticism of the Associations’ Agreement on Electricity II plus’ principles for establishing prices

An economic expertise commissioned by the Bundeskartellamt largely confirms the agency’s criticism of the principles of establishing prices stipulated in the Associations’ Agreement on Electricity II plus.

In its ruling on abusive practices against the E.ON subsidiary TEAG (cf. press release of 19 February 2003) the Bundeskartellamt established that several imputed cost estimates of the Associations’ Agreement on Electricity II plus were excessive and thus abusive. The expertise, prepared by Professor Gebhardt Zimmer, Head of the business administration faculty: fiscal economics and banking at the University of Oldenburg, comes to the conclusion that the Bundeskartellamt’s approach is tenable. Professor Zimmermann confirms the Bundeskartellamt’s view that an electricity network operator does not have an elevated entrepreneurial risk and that estimating exclusively cost-increasing imputed taxes results in abusively excessive costs. In order to increase transparency Professor Zimmermann calls for giving up depreciation at current cost value and taking into account inflationary effects through the capital-market interest rate. In addition he comes to the conclusion that imputed depreciation has to be balanced out on the basis of the actual replacement costs of the fixed assets in question.

TEAG had filed an appeal against the Bundeskartellamt’s decision before the Düsseldorf Higher Regional Court. The Bundeskartellamt has now introduced Professor Zimmermann’s expertise into the court proceedings.