Price of electricity stable for domestic customers until end of 2007. Requested network charges reduced by 12.2%.

The Federal Network Agency BNA has taken a decision today on the specification of network charges for the grid operator Lechwerke Verteilnetz GmbH. In its letter, it reduces the requested network charges of approx. € 270m by 12.2 per cent. The new network charges are applicable from October 1, 2006 until December 31, 2007. The main focus of the reductions is on the imputed costs and on the return on capital employed.

“The decision has dealt a blow to our grid business,” says Ulrich Kühnl, member of the Board of Management of Lechwerke AG. The effects of the reductions on users will vary depending on the type of customer.

In tariffs for domestic customers the reduced network charges are fully covered until the end of 2007, due to an agreement, dated September 19, 2006, between the Bavarian Ministry of Economics as the price supervision authority and Lechwerke. In the agreement Lechwerke undertakes to leave the net price of electricity unchanged for domestic customers until the end of 2007. This is to avoid any dramatic price fluctuations which would otherwise be caused by rises in electricity procurement costs, on the one hand, and by reduced network charges, on the other.

In the case of industrial customers of Verteilnetz GmbH, the changes to network charges will be passed on in full.

Lechwerke AG forms part of RWE Energy AG, which is the sales and network company of the RWE Group in continental Europe. LEW employs a workforce of nearly 1,600 and supplies electric power to a population of approx. 1 million in Bavarian Swabia and in parts of Upper Bavaria.