Prices are curbed by declining network fees
The German Federal Network Agency has meanwhile approved the network fees for electricity of the distribution system operator Süwag Netz GmbH. 14.3% of the network costs applied for have not been accepted in the notice. As a result, revenues of network usage fees are declining by an amount in the high-double digit millions. The new network usage fees are effective from 1 November 2006 to 31 December 2007 for all energy suppliers in the network territory of Süwag Netz GmbH.
The reductions of the Federal Network Agency relate in particular to the imputed costs such as depreciation and return on equity. "The decision constitutes a major interference with our network business", says Dr. Klaus-Peter Balthasar, Chief Executive Officer of Süwag Energie AG.
"Of course, we will pass on the new network fees to our customers", says Professor Dr. Joachim Hofmann, responsible for sales/engineering on the executive board of the energy utility. "However, they do not lead to lower electricity prices because the reduction of network fees has been overcompensated for by significantly higher procurement costs and price elements imposed by the government, such as the turnover tax increase to 19%, for example," the board member responsible for sales continues.
Due to the electricity price application which has meanwhile been approved by the Hessian Economics Ministry, the price per kilowatt hour (kWh) will rise by 0.75 ct/kWh net, or by 4.6% in the "general tariff" (basic and substitute supplies) as from 1 January 2007. The Hessian Economics Ministry also approves prices for the regions supplied by Süwag Energie AG in Rhineland Palatinate, Baden-Wurttemberg and Bavaria. This is why new prices apply accordingly to the customers in these federal states.
The turnover tax, too, is rising from 16% to 19% as from 1 January 2007 with a corresponding impact on gross prices. Overall, the energy rate is thus increasing from 16.81 ct/kWh to 18.14 ct/kWh, the standing charge from 62.64 €/a to 64,26 €/a.
At an average consumption of 3,500 kWh per year, the monthly electricity bill will thus be about 4 euros higher.
In this context, Hofmann pointed out again that Süwag Energie AG's electricity prices for residential and SME customers had remained stable since January 2005.
Due to the significantly higher procurement costs, Hofmann went on to say, the price increase as from the 1 January had to be more pronounced. Prices had been curbed for customers, however, by the lower network usage fees. Overall, only part of the higher wholesale prices is therefore passed on to the customers with this price increase. However, there had simply been no choice but to pass on the higher turnover tax.