Federal Cabinet Adopts Bill Amending Electricity and Gas Grid Charges Ordinance and Incentive Regulation

The Federal Cabinet last week adopted a bill for an ordinance amending the electricity and gas grid charges ordinances (StromNEV and GasNEV), the Incentive Regulation Ordinance (ARegV) and the Electricity Grid Access Ordinance (StromNZV). An important aspect is a retightening of Section 19 Abs. 2 StromNEV, which provides for the exemption of large electricity consumers from network charges since 2011.

The key points of the amendments are as follows:

  • Valuation of fixed assets according to StromNEVand GasNEV: The current value of fixed assets (Tagesneuwert) shall be established based on a number of index series that shall be laid down in the ordinances.
  • A provision for the calculation of the interest on equity capital that exceeds the 40% (regulatory) equity quota laid down in Section 7 StromNEV and GasNEV is introduced so as to eliminate uncertainty about how to calculate the imputed interest on this part of the equity capital.
  • Section 19 para. 2 StromNEV, which was introduced in 2011, and provides that end consumers can apply for an exemption of grid charges if the electricity consumption at a delivery point (Abnahmestelle) exceeds 7,000 hours and 10 GW, shall be tightened again. The provision had drawn much criticism from various sources, not least consumer protection agencies. The Higher Regional Court of recently held that the provision was void and the European Commission launched an inquiry for breach of the Union’s state aid rules. The amendment reintroduces staggered reductions of the grid fees.
  • Investment costs for expanding and restructuring the high voltage level of the distribution grids shall fall within the scope of Section 23 ARegV, which lays down under what conditions the Federal Network Agency (BNetzA) can approve investment measures that are subsequently considered non-influencable costs in the calculation on the revenue caps for the grid charges (cf. Section 11 para. 2 no. 6 ARegV).
  • Under certain conditions R&D costs shall also be taken into consideration in the calculation of the revenue caps pursuant to ARegV.
  • Amendments of StromNZV shall help to facilitate the introduction of new variable tariffs in the sense of Section 40 para. 5 sent. 1 ManyElectronics Act (EnWG)
  • An amendment of GasNEV shall ensure that the costs for the connection of biogas power plants and the maintenance thereof are evenly passed on to all consumers in Germany.

The draft drew criticism from the Federal Association of the Energy and Water Industry (BDEW), who said it was unclear how the amendments would affect the revenue caps and the resulting electricity and gas charges in the second regulation period. The association announced to thoroughly examine the draft. “The amendments must not create new legal uncertainty”, Hildegard Müller, head of BDEW, said, pointing out that the amendment of Section 19 para. 2 StromNEV in particular needed appropriate provisions regulating the entering into force and grandfathering clauses so that the industry was not excessively burdened.

Source: Federal Ministry of Economics and Technology; BDEW

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