Precedent set by pricing office, tariff hike refused

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An electricity pricing authority in northern Germany has stopped utility Schleswag from hiking its electricity prices to raise money for meeting wind power payments. Schleswag had applied to the Schleswig-Holstein Price Supervisory Office in Kiel for permission to increase its tariff by DEM 0.011/kWh.

The decision sets an important precedent. A clause in the Electricity Feed Law, which obliges utilities to pay a premium price for wind power, specifically allows utilities to raise prices to meet their wind payments. Schleswag claims the extra cost of buying wind power in 1996 amounted to DEM 80 million. Its majority shareholder, Preussenelektra, says the rejection of the application by the price control office was "not correct." In its ruling, the pricing authority says it will review the decision next year, after this year's expected amendment to the EFL.

Meantime, the Lower Saxony Price Supervisory Office is due to rule on a similar application by utility EWE of Oldenburg. It says buying wind energy from the increasing number of wind plant in its district is likely to reach DEM 60 million this year, following an additional cost in 1996 of DEM 40 million. Two years ago, EWE was allowed to hike its prices by 6.5%, 5% of which was to raise money for paying for wind power, according to the utility.

In a comparison of average electricity prices charged by 50 west German utilities, EWE sells the third most expensive electricity and Schleswag the twelfth most expensive, according to the consumer group Bundesverband der Energie-Abnehmer.

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