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Electricity and gas: network operators have to reckon with falling returns

2021-06-22T06:30:37.213Z

With the equity interest rate, the Federal Network Agency regulates which fees may be charged for power lines. According to a media report, it should sink, but the official decision is still pending.



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Power lines: Hundreds of network operators affected

Photo: Jochen Tack / imago images

According to a media report, operators of electricity and gas networks are threatened with a significant reduction in the return on equity.

As the "Handelsblatt" reports, the Federal Network Agency wants to reduce the rate from the current 6.9 percent to 4.59 percent.

The reduction would affect hundreds of network operators, including listed companies such as E.on.

The Federal Network Agency itself later announced that it would not publish the reports on determining the interest rate until July and give the market the opportunity to comment. "A decision on the level of the equity interest rate and in particular the so-called risk surcharge has not yet been made," said the Bonn authority. A reduction in interest rates could have a relieving effect on consumers, as the costs are passed on to them via the network charges.

E.on considers the prospective reduction to be unjustified.

"If we manage the energy transition and keep key industries in Germany or even want to establish new ones, the network expansion is also an important factor," said Group Board Member Thomas König of the "Handelsblatt".

And this network expansion must be sufficiently remunerated, added an E.on spokesman.

»95 percent of renewable energies go into the distribution network.

That is also the case with us. "

Authority regulates fees for line usage

In Germany, the Federal Network Agency determines how much money an energy company can earn with its power lines. With the equity interest rate, the authority regulates which fees the operators may charge from electricity suppliers for the use of their lines. Otherwise, among other things, consumer advocates fear that the operators, who also act as suppliers, could force other companies out of the market and prices rise.

The equity interest rates are always set for five years by the Federal Network Agency.

In 2016, the authority had already reduced the equity interest rate from 9.05 percent to around 6.9 percent.

Network operators had sued against this, but the Federal Court of Justice (BGH) ruled that the reduction was lawful.

The power grids are one of the business areas that bring the operators the highest returns.

hba / Reuters

Source: spiegel

All business articles on 2021-06-22

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