Germany

Germany

UTILITIES FORCED TO CLIMB DOWN

Political pressure has made Badenwerk and Kraftübertragungswerke Rheinfelden say they will now comply with Germany's Electricity Feed Law (EFL) while the third member of the rebellious trio, municipal utility Stadtwerke Geesthacht, has not yet budged from its position of refusing to pay the premium prices set by the EFL for renewable energy. The fact that EFL does no more than fix the minimum price for renewables electricity to be paid by monopolist utilities to small, independent suppliers means that EFL has no parallel with the Kohlepfennig levy, as the utilities have claimed.

In the face of massive political pressure, two of the three German electricity utilities which announced they would no longer pay premium prices for renewable energy (Windpower Monthly, June 1995) have backed down on their rebellious stance. Badenwerk and Kraftübertragungswerke Rheinfelden (KR) say they will now comply with Germany's Electricity Feed Law (EFL). However, the third member of the rebellious trio, municipal utility Stadtwerke Geesthacht, has not yet budged from its position of refusing to make proper payment for the electricity generated by a wind turbine owned by the Hamburg Asphalt Mischwerke (HAM).

Meantime, Badenwerk, of Karlsruhe, has agreed to pay the full EFL rate for hydro power from the beginning of June after Baden-Wuertemberg Economy Minister Dieter Spöri initiated court proceedings over misuse of monopoly privilege. Similarly, KR also caved in during proceedings before the Mannheim Cartel Court brought by a second hydro operator it had victimised. KR will now pay the full EFL rate, backdated to May 1, 1995. Both utilities have also withdrawn their provisos on EFL payments in which they threatened to demand money back from renewables operators if they managed to get the EFL declared unconstitutional.

In contrast, the case between HAM and the Stadtwerke Geesthacht is still log-jammed. The utility has taken no action after being told by the head of Schleswig-Holstein's energy department, Klaus Rave, that there is no legal justification for its action. The utility has told HAM that it will only buy electricity from the wind turbine which is in excess of that used by the company -- even though HAM has a contract to sell wind power from the turbine to the utility. HAM feels, however, that it is only a question of time before the utility retreats. "The EFL bears the signature of both the Chancellor and the President of the Federal Republic of Germany and I thoroughly recommend that it is adhered to," comments the asphalt company's Ekkehard Papke.

The rebellion by the three utilities was part of a campaign to undermine the EFL initiated by the powerful German utilities association, VDEW Frankfurt. By refusing to pay the proper EFL rates, the electricity companies had hoped to provoke a legal battle which would eventually lead to the EFL being declared unconstitutional. Their gamble has not paid off. Political support for the EFL has strengthened and the utilities have emerged from the fray in sackcloth and ashes.

Meantime, yet another expert report on the EFL has appeared on the scene, this time commissioned from lawyer Professor Rupert Scholz by the federal association of renewable energies (BEE). Unlike the VDEW's earlier report, this one concludes that the EFL conforms with the German constitution. According to Scholz, the EFL does not impose a levy on the population and then use the proceeds for specific subsidies. This was the case with the infamous Kohlepfennig, a levy used for years to raise money for coal subsidies, but declared illegal by the Federal Constitutional Court last year. In contrast the EFL does no more than fix the minimum price for renewables electricity, says Scholz, to be paid by monopolist utilities to small, independent suppliers. The EFL therefore has no parallel with the Kohlepfennig levy, as the utilities have claimed.

Scholz argues that the EFL conforms with other aspects of the constitution: the price mechanism is moderate, suitable and necessary to fulfil the aim of protecting the environment. In particular, Article 20, added to the constitution in November 1994, includes protection of the environment as an explicit aim of the constitution. Scholz argues that renewables are thus a special case and should be treated accordingly.

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