Eberwerk is short of cash - do municipalities have to step in with tax money?

The municipal network operator Eberwerk warns of delays in the energy transition in view of tight budgets.

The citizens of the district of Ebersberg could have to create a compensation through tax money.

District

- The idea sounds logical: If the production of the decentrally produced amount of electricity from wind energy, photovoltaics and biomass increases sharply in the Ebersberg district, it makes sense to have a local power grid.

It completes the value chain in the region.

For this reason, too, the “boar factory” was founded, in which 19 district municipalities participate.

But now there are difficulties.

Eberwerk GmbH has sent a call for help to Federal Minister of Economics Peter Altmaier (CDU), all 19 mayors and district administrator Robert Niedergesäß (CSU) have signed the letter.

There was a first indication of financial difficulties in the most recent city council meeting in Ebersberg.

City councilor Alexander Gressierer (CSU) in particular expressed concerns about the stability of the boar factory.

“No financial strength” for future-proof expansion

These do not seem to have been made out of thin air.

Because on November 26th last year, Eberwerk managing director Markus Henle sent a letter to political decision-makers, associations and the Federal Minister of Economics.

The central sentence in it: "For our company, it can be derived specifically that under the framework conditions mentioned there will be no financial strength to expand our electricity grid in the Ebersberg district in a sustainable manner."

The return on equity that network operators are allowed to apply has changed, and this has a direct impact on income.

An example: If a network operator invests around 100,000 euros in a power line, he may add interest to the fee calculation for the transmission of power to the consumer.

Eberwerk warns of negative consequences for the energy transition

"If the current regulatory stipulations are continued by the Federal Network Agency next year, the equity interest rate threatens to drop by a further 2.6 percent to as much as 3.5 percent after taxes," complains Henle in the letter to Altmaier.

That corresponds to halving the previous interest rate.

"Such drastic changes are not without consequences for network operators", warns the managing director of Eberwerk.

He also cites “negative consequences for the advancement of the energy transition”.

According to the Federal Association of Consumer Centers, the equity interest rate should "ensure the market rate of return on the capital employed and create the incentive for necessary investments in the electricity and gas networks".

But now that bank interest rates have fallen to zero, equity interest rates must also fall, is the logic behind this.

This is not controversial among entrepreneurs: just because they no longer receive any interest on their money from the bank does not mean that they can also pass on their products or services to the consumer for free.

Experts in the industry argue that this would only make sense with a high proportion of outside capital.

Interest should reduce consumer costs - at the boar factory, this could hit the municipal coffers

The calculations to determine a reasonable price are becoming more and more complicated, reports Florian Rothmoser from the Grafingen electricity supplier of the same name.

“The requirements are increasing.

Somebody has to be commissioned externally, ”that is how complicated the process has become.

Now that the interest rates are reflected in the network charges that all energy customers pay, lowering them should help prevent the price of electricity for end consumers from rising any further.

For the FDP district association, the letter to Minister of Economics Altmaier is an alarm signal.

The Liberals see "the necessary, future-proof expansion of the communal power grids in the district in jeopardy".

There is no other way to interpret the letter, says FDP district chairman and district councilor Alexander Müller.

"The FDP pointed out this financial risk in vain when the municipalities in the district took over the Eon electricity network."

Müller fears that the communities as shareholders of the boar factory could face new burdens.

His demand: "We need more transparency in the energy transition and its costs."

All news from the Ebersberg district at the Ebersberger Zeitung.