These measures have brought many changes to the energy sector and in particular have led to a reduction in energy consumption as well as lignite production and consumption. The electricity and natural gas sectors are characterised by their large number of enterprises and by an involvement of municipalities. Exclusive concession contracts with municipalities and demarcation agreements have impeded competition. There are also cross shareholdings between energy enterprises, industry and finance and among enterprises in the same sector. Revenues from natural gas and electricity sales are partially used to finance other activities.
Municipalities collect concession fees from gas and electricity distribution companies.
Jurisdictional procedures undertaken by the competition authorities at Land or at Federal levels aim at protecting electricity and natural gas consumers against abuses of dominant position. Jurisdictional procedures may last some years when cases have been appealed to higher courts but parties can settle out of court. The general lack of competition in the German energy sector has led to a high level of electricity and natural gas prices and possibly, cross subsidies between consumers. For this reason the Government is rightly working on regulatory reforms to introduce more competition in the electricity and gas sectors. The energy law of April 1998 abolished exclusive concession contracts and demarcation agreements and opened the electricity and gas markets in one stage to all consumers, including households.