EU probes German big industry’s power price breaks

The European Commission said it has opened an in-depth inquiry into the exemptions from power grid charges enjoyed by big electricity-consuming companies in Germany. “If this turns out to be the case, the Commission will further examine whether the exemption is likely to unduly distort competition in the EU or whether it can be justified,” the EC said in a statement.

The economy ministry in Berlin said the exemption was not a state subsidy, while utilities’ association BDEW said it would demand support in collecting any monies the industry might be found to be owing. The exemptions, granted in 2011 to big companies in areas such as metals, chemicals, glass, cement and building materials, are meant to safeguard their international competitiveness as German power prices are among the highest in the EU.

Worth 300 million euros ($390 million) in 2012, they have added to the power bills of remaining consumers, which triggered complaints to the Commission. The statement stressed the opening of an investigation does not prejudge its outcome. The economy ministry said it would study and answer the issue within a month.

A spokesman said the ministry had no role in levying network usage fees, which consumers pay as part of their power bill, so the waiver could not be considered as a state subsidy. The exemption also recognised the network-stabilising role of the big companies, he added. Stable and sizeable demand helps transmission grid operators gauge how to best steer the supply fed onto power lines, which must always be balanced because hardly any power can be stored.

Also, big companies such as BASF have on-site power generation units for their own use which are able to feed power into the public grid. Utility lobby BDEW said should the industry need to pay up retroactively, this would require a practicable and non-bureaucratic approach. “It cannot be that the energy firms take responsibility for possible legislative errors,” it said in a statement.