German electricity company loses at Cartel Office

20th December 2006, Comments 0 comments

20 December 2006, Bonn (dpa) - RWE, one of Germany's big two power producers, has lost a case before the Federal Cartel Office over sharp increases in the price of wholesale electricity in 2005, and a similar finding against the other main company, E.ON, is expected.

20 December 2006

Bonn (dpa) - RWE, one of Germany's big two power producers, has lost a case before the Federal Cartel Office over sharp increases in the price of wholesale electricity in 2005, and a similar finding against the other main company, E.ON, is expected.

The competition watchdog in Bonn announced its finding Wednesday that RWE had improperly claimed the cost of carbon-dioxide emission rights as a grounds for increases and abused its market dominance.

The finding is expected to help electricity distributors and industry in legal action for redress.

The dispute began when an electricity trader and five industrial associations complained to the anti-monopoly agency. Ulf Boege, head of the Cartel Office, said RWE and E.ON jointly dominated the market, generating 60 per cent net of Germany's power.

In a response, RWE called the finding incomprehensible, saying it had used a pricing mechanism accepted throughout Europe.

The case is one of many in which both industrial and private customers in Germany have challenged stockmarket-listed RWE, E.ON and other big energy groups to justify price hikes for power and gas.

A hearing began the same day before the German High Court in Karlsruhe in which a private householder is seeking a finding that the retail price of piped gas can be reviewed in the courts.

Tens of thousands of Germans have refused to pay increases, demanding that energy companies first disclose their purchase costs and mark-ups.

Copyright DPA

Subject: German news

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