WRITTEN QUESTION No. 2701/96 by Karin RIIS-JØRGENSEN to the Commission. Subsidizing of electricity prices in the former GDR
Date: 1996-10-15
Institutions: European Parliament, RIIS-JOERGENSEN
Subjects: German Democratic Republic, aid to industry, contract, economic support, electrical energy, energy distribution, reduced price, restriction on competition, supply













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91996E2701

WRITTEN QUESTION No. 2701/96 by Karin RIIS-JØRGENSEN to the Commission. Subsidizing of electricity prices in the former GDR  


Official Journal C 083 , 14/03/1997 P. 0050 





WRITTEN QUESTION E-2701/96 by Karin Riis-Jørgensen (ELDR) to the Commission (15 October 1996)Subject: Subsidizing of electricity prices in the former GDRVEAG, the German electricity giant, was allocated a 70% share of the electricity market in the former GDR when the latter became part of the Federal Republic.In order to secure the market for lignite-based electricity over the next five years, VEAG intends to spend DM 150 m per annum on direct kWh-based subsidies for electricity supplied in excess of the 70% limit.It is expected that VEAG's DM 150 m per annum subsidy will be used to hold on to those parts of the market which comprise price-sensitive business customers and alternative/planned autoproducers' joint power-generating stations.Does the Commission consider such subsidizing of electricity, which has begun or is planned, to be compatible with current EU competition rules?Does it not consider that competition would be distorted if VEAG uses such subsidies to hold on to commercial customers who, if competition were fair and transparent, could opt to use environment-friendly natural gas-based electricity supplied from Denmark via the newly inaugurated Kontek link or establish their own joint CHP plants?Joint answer to Written Questions E-2701/96 and E-2925/96 given by Mr Van Miert on behalf of the Commission (27 November 1996)According to the German authorities the agreements within the 'Energiekonsensrunde Ost' were reached among the ministers of Economic affairs of the Neue Länder, the federal ministry of Economic affairs, representatives of the East German energy industry and representatives of the lignite industry and its owners on 31 January 1996 in Erfurt. The aim was to secure the electricity supply in the East German Länder in the long run and to promote East Germany as an industrial site. The German authorities emphasized that the agreements were exclusively political declarations without any legal commitments. Neither the German government nor the local governments involved entered any commitments. It was also emphasized that, with regard to the agreements, there do not exist any contracts concerning the companies Veag and Laubag or other companies. Alleged arrangements with the Danish ministry of economics were also denied.However, it was confirmed that Veag intends to offer an annual discount to regional energy distribution companies up to DM 150 millions if electricity beyond their 70% energy demand is purchased from Veag. This discount refers to electricity contracts with a duration of 20 years, agreed in 1990 between the predecessor company of Veag and the regional East German energy suppliers for 70% of their energy demand. Veag's purpose is a better utilisation of its energy plants which are more than 95% lignite-based.Therefore, the Commission is currently investigating whether Veag offers discounts with regard to economic criteria and in compliance with the EC Treaty competition rules.