X Factor: Bill for General Sector-related Productivity Rate Factor Passes Federal Council

The Bundesrat (Federal Council) did not exercise its constitutional right to object against an amendment of the German Energy Act (EnWG) that will create the statutory basis for a general sector-related productivity rate (so-called X factor or Xgen) in the Incentive Regulation Ordinance (ARegV).

The X factor is part of the regulation formula in the ARegV that determines the revenue caps for the grid fees German network operators can charge. In June the Federal Court of Justice (BGH) had held that the general sector-related productivity rate pursuant to Section 9 para. 1 ARegV may not be applied as it lacked a statutory basis in Section 21a German Energy Act (EnWG) that gives the legislative authority to issue ARegV. Hence the government decided to amend the EnWG accordingly.

The EnWG amendment will now be submitted to the Federal President for signature. It will then be promulgated in the Federal Law Gazette and will enter into force the day after.

Source: Bundesrat

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