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Customers wasting billions on electricity

The Local · 14 Sep 2011, 09:07

Published: 14 Sep 2011 09:07 GMT+02:00

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The Frankfurter Allgemeine Zeitung reported the survey, which compared prices across the country, showed that a three-person household using 4,000 kilowatt hours paid an average of €1,091 a year when using the regional provider.

That is €295 a year more than the cheapest alternative provider would charge, the paper said – and added that the rock-bottom prices achieved with pre-payment schemes were not even included in the calculation.

The 27-percent price difference is important as around 45 percent of all households still do not take advantage of the liberalisation of the electricity market, but have stuck with their expensive providers.

In 41 percent of cases customers have changed the tariffs they pay, but not the provider, while only 14 percent of those surveyed had changed the company from which they buy electricity.

The Monopoly Commission also looked at which provider was the cheapest – and found that municipal-run regional providers and the four largest firms – Eon, RWE, Vattenfall and EnBW - were not the best-priced.

“In nearly 99 percent of all cases, these are private providers which are not run by the municipalities, and which do no belong to one of the four big energy firms,” said head of the Commission Justus Haucap.

“The cheapest tariff was only found 11 times among the municipal providers and only 67 times from a provider owned by one of the four big energy firms.” Even the second-cheapest tariff was only very seldom – in around one percent of cases – offered by municipal providers – although the four big firms accounted for 10 percent of these.

The commission thus questioned the current practice of municipal-controlled firms buying back electricity generating stations and provision networks.

Story continues below…

Competition in the German electricity and gas market has increased over the last two years, said the report, not least due to the shut down of the nuclear power stations, which is pushing the share of the market held by the four big providers down to less than 80 percent, the FAZ said.

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The Local (news@thelocal.de)

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Your comments about this article

10:52 September 14, 2011 by fourwheeler77
When we moved, we were going to go with Yello for electricity. The tariff was cheaper, but we stuck with RWE because I do not have to pay taxes through them. That ended up making it around the same price as Yello.

It would be nice to see more competition in the USA for Gas and Electric. No matter where you live in the USA, it seems like big companies have the monopoly and there are really no other choices.
12:11 September 14, 2011 by lwexcel
The U.S. experimented with deregulating the markets like in Europe, the result was rolling blackouts through the state of California as well as a lot of people paying over $1,000 a month in utilities costs.

My only problem with the utility companies here in Germany is that they charge you a flat rate and hold the money that is overpaid until the end of a specific time. The issue there is that the money that they hold is most likely kept on a savings account or used to purchase some sort of short term investment. Meaning that these companies are earning millions of extra euros per year off of our money.
13:27 September 15, 2011 by powertastic
You do not have to pay what they ask, if you wish you have 2 other choices,

1, you can check you meter each month then calculate and pay, or

2, you just pay less then they ask each month then you will need to pay any extra at the end of the year.

You should think rather than just believe every letter you get, the company would prefer you to pay the average of your last year¦#39;s bill (rounded up of course) but you do not have to.

I simply subtract a few Euros from the average they ask for (say 5%-10%) then at the end of the year I see where I am.
14:23 September 15, 2011 by rosenthalenglish
This is not the whole truth being given:We tried to change to a prepay provider from RWE 3 years ago.It would have saved us over €600 minimum annually.We filled out all the paperwork only to find out why locals called RWE a MONOPOLY and the fact you couldn't change.We had to stay with overpriced RWE because Füssen is apparently not on the German National Grid!
19:29 September 16, 2011 by dr.makni49
The entire system is topsy-turvy in Pakistan and soaked in corruption where we have no choice but to avail service from a single Govt owned company. Some investor companies have come but they contract with the govt the predetermined price which sky rockets because of hidden kick backs to the govt officials in Pakistan.

Why German companies do not travel to Pakistan and explore the huge market of 180 million people and afford some respite to the masses....just a suggestion!
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