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German Churches Set Up Energy Firm to Fight Rising Fuel Prices

To counter rising fuel prices, a group of Catholic and Protestant Churches in southern Germany has set up its own one of a kind non-profit energy company to supply gas to parishes and charitable institutions.

gas ring with someone lighting it with a match

The cross-denominational venture aims to slash gas prices by some 10 percent

Hit hard by spiraling energy prices, four big Catholic and Protestant churches in the southwestern German state of Baden-Wuerttemberg have joined forces to create the Society for the Supply of Energy to Church and Social Institutions (KSE) last month.

The company aims to provide gas some 10 percent below market prices in Germany by January 2009.

It's hoped the venture will help the churches get a grip on runaway energy prices.

In 2003, the diocese of Freiburg spent 15 million euros ($22 million) on energy consumption. Three years later, that figure had climbed by more than 45 percent to some 22 million -- taking up almost 20 percent of the church's budget.

"The costs are a huge burden. I don't think that we would have taken any action otherwise," KSE supervisory board chairman Johannes Baumgartner said. "It's our aim to offer gas at a reasonable price. If we can supply gas at a lower rate by cutting out the middle man, then we have done a good job. We just want to be cheaper."

Offering energy at more Christian prices

Hospital staff changing a bed in a hospital

Social institutions, such as hospitals, will also be able to profit from the project.

Baumgartner said he believed the KSE stood a good chance of undercutting other energy companies.

Since the fall of 2006, Germany's gas market has been liberalized and is now open to household customers. Just like in the electricity market, gas consumers are now free to choose their provider. As a large consumer, KSE hopes to buy its energy supply directly where other state utilities get theirs from.

Though gas prices are index-linked to oil prices, Baumgartner said KSE could offer more reasonable gas prices than other energy companies.

"On the one hand, we have written into our statutes that we are a non-profit making organization. On the other, we have a very lean administrative structure," he said. "We have outsourced the purchase of gas and the billing process, and already agreed fixed costs there. And we are also trying to keep down organizational and operational costs to as modest a level as possible."

The KSE has employed an energy acquisition agent who also works for big energy companies to buy gas directly at the stock exchange or by calling for tenders -- also thereby cutting costs.

The project is the first of its kind in Germany and has met with interest in other dioceses, according to Baumgartner.

"At first we want to concentrate on supplying gas to our parishes and to charitable and social organizations here in Baden-Wuerttemberg. If that works out well, we'll be glad to welcome others from outside who increase our purchasing capacity," he said.

Project could cut health care costs

Patrick Hueter who works at the day clinic in the town of Spaichingen said the savings could be considerable. His clinic is part of the Vinzenz von Paul Hospital which runs a host of clinics and organizations across Baden-Wuerttemberg.

"If you consider that everyone is always grumbling about the costs rising, particularly in the hospital sector," he said. "If the church can manage to supply energy at a lower cost, then it will also be possible to keep down health insurance contributions."

The churches in Baden-Wuerttemberg aren't planning to stop at lowering gas prices. Their cheap electricity contracts expire at the end of 2010.

Starting 2011, Baumgartner said the churches could also be set to make their debut in the electricity market.

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