Energy crisis puts a strain on municipal utilities – some even stop taking on new customers

Created: 10/25/2022 13:17

By: Patricia Huber

Due to the increased gas prices, more and more consumers want to change their provider.

If you don't want to go to the basic supplier at home, you sometimes have a bad hand.

Berlin/Munich – Consumers will have to pay significantly more for gas in the coming months.

A number of suppliers have already adjusted their prices or planned an increase.

As a result, more and more customers are considering switching energy providers.

But with providers outside of your own region, you could quickly come up against limits.

Gas crisis: Several municipal utilities are no longer accepting new customers

At the moment, several municipal utilities are no longer able to take on new customers or are letting contracts with customers who do not live in their supply area expire, explained a spokesman for the Association of Municipal Companies (VKU) when asked by dpa.

"That applies to the gas supply outside of the basic supply."

Within the basic service, on the other hand, a restriction to existing customers and a refusal of new customers is not legally possible.

According to the Energy Industry Act, the basic supplier is the energy company that supplies the most household customers in a region with electricity or gas.

In many cases, it is the local municipal utility or area network operator.

In a joint appeal, local authority and energy associations recently pointed out the problems facing suppliers caused by the energy crisis and called for state support for the companies.

As the situation continues to worsen, stabilization measures are needed for municipal utilities and other regional energy suppliers that are accessible in all federal states and offer help in an emergency, according to a letter to the Prime Minister.

Energy crisis: Follow-up contracts are on the brink at Stadtwerke

In the letter, the leading associations also referred to the influx of customers, which meant that the default suppliers had to procure more energy unplanned – despite the extreme price level.

"As understandable as the idea of ​​many people is to fall into the basic service out of concern about rising prices, this undertaking is as difficult for the municipal utilities," explained the VKU spokesman.

Not only have the procurement prices risen sharply, but the cost of interim financing is also increasing - i.e. the amount with which municipal utilities have to bridge the time from purchasing to reselling to their customers and to increasing the discounts.

“Both together increase the liquidity needs of the municipal utility.

This in turn affects the ability to serve customer requests for electricity and gas, ”explained the spokesman.

Because the preliminary and interim financing burden increases with the gas quantities to be procured.

The result is that more and more municipal utilities are concentrating on supplying their existing customers.

"They restrict new customer business, and follow-up contracts are also in question."

Even if customers are no longer able to pay their bills, this has consequences for the suppliers: "Payment defaults of more than ten percent can deplete the equity of the public utility company and cause them liquidity problems."

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Gas crisis: New customers have to adjust to higher prices

The Munich-based Stadtwerkeverbund Thüga also spoke of an unexpectedly large number of new customers who had to be taken on by discount providers as part of the "replacement supply".

"What is certain is that no customer will be turned away by a basic supplier, but that the municipal utilities and municipal suppliers will fulfill their statutory mandate and supply energy customers safely and reliably even in times of crisis," explained a Thüga spokesman.

However, new customers in particular would have to adjust to higher prices.

Currently, more and more of the long-term negotiated and relatively cheap supply contracts for natural gas compared to current conditions are expiring - and new contracts should have been concluded at much higher prices.

"This leads to higher prices, especially for contracts for new customers."

The Federal Association of Consumers had recently reported a multiplication of the number of advice from gas and electricity customers.

A spokeswoman said that special difficulties when changing providers were not currently an issue in the consultations.

A spokesman for the comparison portal Verivox explained that the restrictions on new customer business have not only been an issue for municipal utilities since the beginning of the energy crisis, but also for other providers.

"We can already see that competition is restricted as a result," said the spokesman.

In view of the extreme price differences, many people are currently using the portal to find out about the prices of the providers.