Rebuff for industrial electricity rebates

rebuff for industrial electricity rebates

The higher regional court of dusseldorf on wednesday overturned the exemption of large industrial electricity consumers from grid costs. In addition, the EU commission in brussels initiated a procedure to investigate suspected unlawful aid because of the cost exemption.

The costs of the regulation have so far been added to consumers’ electricity prices by way of a levy. Federal economics minister philipp rosler (FDP) now wants to quickly re-regulate the controversial industry exemption.

The case in dusseldorf concerned an appeal by five regional and supraregional network operators against the regulation passed in the summer of 2011. The complainants considered the complete exemption of companies with high electricity requirements to be unlawful and a violation of EU law.

Presiding judge wiegand laubenstein concurred: the ordinance was unconstitutional and void. Laubenstein also said that a complete exemption from network charges was not permissible for reasons of equality. The decision of the court of appeal is not yet legal.

Grid fees are part of the price of electricity and are used to pay for the transmission of electricity to the power outlet. In order to finance exceptions for the industry, a special levy had been introduced: each burger currently has to pay 0.329 cents per kilowatt hour (kwh), which amounts to 11.50 euros per year for a household with a consumption of 3500 kwh.

If the eu commission concludes that the rebates constitute state aid, the brussels regulator will examine whether the aid gives the beneficiaries of the scheme an advantage over competitors in other eu countries. "Since december 2011, the commission has received various complaints from consumer organizations, energy companies and citizens that this is an inadmissible state aid," the commission stressed in brussel.

Rosler’s spokesman said in berlin that there was no state aid involved in this case, but that the exemptions were financed by the levy on all electricity customers. Nevertheless, he made it clear: "the federal ministry of economics is currently working on a reorganization anyway".

The full exemption could be supplemented by graduated rebates depending on consumption. Following a change in the 2011 electricity grid fee ordinance, companies are completely exempt from grid costs if they are permanently connected to the grid for at least 7000 hours per year and their consumption exceeds 10 gigawatt hours per year.

The higher regional court of dusseldorf also recognizes that this is not state aid. "We do not see any unauthorized state aid, because the pay-as-you-go mechanism was set up under private law," said judge laubenstein. The plaintiffs in dusseldorf also complain about false incentives under the current regulation. The exemption distorts competition and creates disincentives for increased electricity consumption to exceed the exemption threshold of ten gigawatts a year.

Together with other, graduated discounts, the regulations add up to a cost of 440 million euros in 2012. Costs of around 800 million expected in 2013. This burdens the electricity prices of the burgers.

EU commission examines exemption from network charges for the first time. If the commission ultimately found that the exemption from fees constituted illegal aid, the companies would have to pay it retroactively, according to the authority. The question was then whether the citizens would be able to retain the money paid via the special levy – here, lawsuits were inevitable.

Grunen faction vice president barbel hohn accused the government of pursuing a policy at the expense of citizens. "Next year, this redistribution was allowed to amount to considerably more than one billion euros. It’s not just the european commission that finds this strange". If you want to lower the cost of electricity for private households, you have to get at the excessive industrial privileges. "The subsidization of network charges must be reversed as soon as possible," demanded hohn.

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