Germans Faced With Rising Power Costs | Business| Economy and finance news from a German perspective | DW | 05.10.2005
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Germans Faced With Rising Power Costs

All around the world, energy prices have soared in recent months. Following the steep ascent of gasoline and natural gas, it looks as if Germans will now also be hit by climbing electricity costs.


Many Germans may soon be paying more for electricity

Just as motorists are facing record prices at the pump and homeowners are receiving inflated gas bills, the next bit of bad news for German consumers rolls in.

On Tuesday, Germany's two largest energy companies, RWE and E.ON, said they wanted to hike electricity prices by a reported 5 or 6 percent starting next year. The utilities justified the higher costs with increasing wholesale prices, expenses from renewable sources and greater demand.

The move was instantly criticized by consumer watchdog groups.

"I have the impression that the energy companies are using the current political vacuum," German consumer protection association spokesman Carel Mohn told the DPA news agency, referring to political stalemate in Berlin following last month's election. "There is no other sector that constantly makes such above-average profits. That shows that competition still isn't working."

EXX kommt in Fahrt

RWE spokesman Wolfgang Schley said in Dortmund on Tuesday that prices on the Leipzig EEX electricity market jumped around 30 percent in the first six months of the year and that

Politicial scrutiny

Politicians, aware that Germans are fed-up with rising energy costs have also rushed to condemn the utilities. Economics Minister Wolfgang Clement on Tuesday called on state officials to check carefully whether higher electricity prices are warranted.

"These price hikes are politically impossible to communicate," Hesse state Economics Minister Alois Rhiel told the Süddeutsche Zeitung. "Therefore I will be especially critical when looking at the petitions."

The decision to push for a rate hike could be undercut by the fact that Germany's third and fourth largest electricity utilities -- Vattenfall and EnBW respectively -- were not planning to raise prices in January.

Renewables not to blame

Offshore Windenergie Meer Blåvandshuk in Dänemark

An official for a renewable energy association said such energy sources, wind power, for example, could not be held accountable for increasing prices. "It's wrong and brazen from RWE and E.ON to associate the hikes in electricity costs with renewables," said Milan Nitzschke from the Federal Association for Renewable Energy.

The electricity news is sure to encourage even more Germans to seek alternative energy sources. Following the recent surge in the cost of natural gas and oil, some are hoping a cozy fire could meet their energy needs. But even that is costing more than it used to.

"A lot of people want to heat with wood again," Schmallenberg forestry official Adalbert Koch told DPA, explaining that firewood had become as much as 40 percent more expensive this year.

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