2012 Grid Charges Rising After Court Decision

Grid charges for 2012 will rise due to a recent decision of the Federal Court of Justice (BGH) regarding a section of the Incentive Regulation Ordinance (ARegV), Berliner Zeitung (BZ) and other papers are reporting.

In June BGH handed down its (first) decisions with respect to ARegV, clarifying certain issues concerning the implementation of the ordinance that were controversial between the German grid regulator, the Federal Network Agency (BNetzA), and the grid operators. Inter alia, the court ruled that a general sector-related productivity rate (genereller sektoraler Produktivitätsfaktor) pursuant to Section 9 para. 1 ARegV, which is part of the regulation formula (Section 7 ARegV in connection with Annex 1), may not be applied as it lacks a statutory basis in Section 21a German Energy Act (EnWG) that gives the legislative authority to issue ARegV.

Pursuant to the regulation formula in Section 7 ARegV in connection with Annex 1, the general sector-related productivity factor is deducted from the inflation factor (that positively influences the calculation for network operators). Pursuant to Section 9 para. 1 ARegV, it is derived from the difference between the general sector-related productivity rate and the overall productivity rate and the difference between the overall cost price development (gesamtwirtschaftliche Einstandspreisentwicklung) and the grid-related cost price development (netzwirtschaftliche Einstandspreisentwicklung). The sector-related productivity rate according to ARegV obliged network operators to lower their charges annually by a certain factor. For the first regulation period ending 31 December 2013, the factor amounted to 1.25%.

The BGH decisions may lead to rising grid charges in the order of up to EUR 2 billion, BZ says, pointing out that Vattenfall Europe increased its grid charges for Berlin by almost 0.5/kWh. Handelsblatt reports an increase of between 7% and 13% for E.ON and and average of 12% for EnBW. Pursuant to Section 20 para. 1 EnWG grid operators have to publish grid charges for the following year by 15 October.

The price effect for consumers remains to be seen. According to data from the Federal Network Agency, for a household with an electricity consumption of 3,500 kWh per year and an electricity price of 23.42 ct/kWh, grid charges constituted 21.4% of the total, i.e. 5.1 ct/kWh.

Source: Berliner Zeitung, Handelsblatt, Rheinische Post, 18 October 2011, page 1

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