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Municipal companies warn of chaos at public utilities

2022-07-02T14:40:06.866Z

Stadtwerke supply local citizens with energy and operate buses and subways. But now they could get into trouble, warns their lobby: massive losses are imminent as a result of the gas crisis.



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Municipal utilities not only operate buses and swimming pools, but also offshore wind farms such as "Dan Tysk" near Sylt.

Stadtwerke München has a 49 percent stake in it.

Photo: Christian Charisius/ dpa

In view of the turbulence at Germany's largest gas supplier Uniper, the Association of Municipal Companies (VKU) warns of a chain reaction - which could also affect German municipal utilities.

Municipal utilities operate the basic supply of the population on a municipal or regional level: for example with energy, but also with services such as local public transport, waste and sewage disposal or the operation of swimming pools.

The federal government is ready to act at Uniper, said VKU general manager Ingbert Liebing of the "Rheinische Post" on Saturday.

"What urgently needs to happen now is an amendment to the Energy Security Act with better instruments to curb the price spiral and maintain security of supply."

Liebing warned against allowing the increased procurement costs to be passed on directly to customers - as provided for in Section 24 of the Energy Security Act, which has not yet come into force.

On the one hand, this price transfer does little to help the public utility company.

On the other hand, many customers would not be able to pay the higher prices.

“That, in turn, would also bring many of our actually very healthy public utilities into liquidity problems and, in the worst case, to the brink of insolvency,” predicted the VKU boss.

"If a critical mass of municipal utilities were to collapse, that could trigger a chain reaction," said Liebing.

»That could lead to chaotic conditions on the energy market, which would definitely get the entire energy industry in trouble and would endanger the security of supply from the ground up.«

It is therefore more effective if the federal government supports companies like Uniper when importing the gas.

»The earlier and further up the value chain the federal government intervenes, the better for the energy industry and customers.«

In addition, municipal utilities and municipal energy suppliers would also have to be secured in over-the-counter trading instead of just hoping for the price to be passed on to customers, Liebing demanded.

The energy company Uniper had asked the state for help in view of the high gas prices resulting from the Ukraine war.

Company boss Klaus-Dieter Maubach confirmed talks with the federal government on stabilization measures on Thursday.

According to SPIEGEL information, state participation is also conceivable.

che/AFP

Source: spiegel

All business articles on 2022-07-02

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