Lowering of Electricity Costs Confirmed by Regulatory Offices

In six judgments of August 14, 2008, the trust senate of the Federal Court of Justice has given consumers of electricity pleasant news while regulating the oligarch electricity providers’ prices. The previous decisions of the regulatory officeswere upheld.


The regulatory offices wanted to cut 20% of the network carriers’ costs. The regulations for this topic are found in §§20 ff. EnWG. These provisions require carriers of energy supply networks to generally admit everybody to their nets and demand a fee for this. This fee was the subject of controversy. The amount of the fee must be cost orientated and is subject to approval by the locally competent regulatory offices. The details for this “cost orientation” are laid out in Electricity Net Fee Ordinane (Stromnetzentgeltverordnung). Next to pure cost factors, also a “profit” in the form of a reasonable interest will be considered for a return on the company’s investment.

What happened? During the approval proceedings, the providers argued with the office on cuts of their profits due to different interpretation of the regulations. The Federal Network Agency as well as the offices of Baden-Wurttemberg, Rhineland-Palatine, took legal recourse against the providers’ profit expectations.

The BGH widely accepted the computation by the regulatory authorities. The main positions the providers could save were their “calculatory depreciations” and “calculatory interest on equity”.  Since the providers were not permitted to deduct a significant amount of their costs, the question arose what is to be done with this extra profit. The court also settled the dispute on the question if and how the now surplus is to be treated. The providers do not have to return the overcharged fees to the consumer because their invoices remain valid. For the next regulatory period, this profit will be considered as an income reducing their costs. In case of the network provider Vattenfall, the profit of € 50 million will reduce their charges for the coming period, when it will be taken into account.



Published on the old CMS: 2008/9/22
Read on the old CMS till November 2008: 1984 reads

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