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ENERGY

German government moves to end short-notice energy contract terminations

With thousands of customers currently left out in the cold by providers cancelling electricity and gas contracts at short notice, Germany is planning to introduce tighter controls on the energy sector.

Heat cost allocator on a radiator
A heat cost allocator, for calculating heating costs, on a radiator. Photo: picture alliance/dpa | Sina Schuldt

The government says it wants to put a stop to short-notice terminations of electricity and gas contracts by low-cost providers as well as sudden price hikes. 

“We must not leave consumers out in the cold like this again,” Oliver Krischer (Greens), Parliamentary State Secretary in the Federal Ministry of Economics, told DPA in Berlin. “This was and is a great burden for many people and a huge shock to suddenly find a notice of termination from the gas or electricity provider in the letterbox.”

Krischer also announced that the there would be uniform tariffs for basic energy supply in future, so that new customers do not face bills that are twice or three times as high as those paid by existing customers.

“Split basic-supply tariffs are in the end just make additional work for the courts, which we want to avoid,” he said.

Split tariffs are when an energy provider offers different rates for new and existing customers.

READ ALSO: How households in Germany can tackle rising energy costs

In addition, energy providers will have to give their customers several months’ notice if they decide to cancel their energy contracts so that people have time to look for a new supplier.

With energy prices soaring over the past year, struggling low-cost providers have cancelled thousands of contracts at short notice, leaving customers grappling to organise a new contract at an affordable rate. 

These consumers then tend to automatically move to the the so-called substitute supply with a basic supplier in their area – but often have to pay significantly more for this back-up service. 

The newly formed Ministry for Energy and Economics, which is run by the Greens, wants to stop this from happening.

Oliver Krischer (Greens) speaks in the German Bundestag

Oliver Krischer (Greens) speaks in the German Bundestag. Photo: picture alliance/dpa | Bernd von Jutrczenka

“There is a need for action,” said Krischer. “We therefore want to raise the hurdles for discontinuing supply and put the instrument of basic and substitute supply on a new footing.”

He added that the ministry would also make proposals on how dubious competitors could be better filtered out by the Federal Network Agency.

“The fact that around one million gas and electricity customers are being terminated within a very short time must not be repeated,” he warned. 

READ ALSO:

Split energy tariffs 

According to a position paper of the Federation of German Consumer Organisations, some new customers have found themselves paying up to €1,654  more per year in tariffs than existing customers.

This is because budget suppliers tend to purchase low-cost energy for their customers in advance to keep costs low in the long-term.

However, with prices rapidly rising due to supply issues and the effects of the pandemic, these same suppliers have been forced to secure more energy at significantly higher prices to cater to a higher-than-expected number of new customers. 

Therefore, some suppliers have started to differentiate between new and existing customers and to supply new customers at more expensive tariffs. In the view of the consumer centres, however, this is legally inadmissible, dangerous for fair competition and incomprehensible. 

READ ALSO: German local authorities demand reduction in energy prices

According to the Ministry of Energy and Economics, concrete proposals for amendments to the Energy Industry Act are now being worked out in close cooperation with the Ministry of Consumer Protection.

The aim is to provide more protection for consumers through clear notice periods before supply is discontinued and to improve the regulations on substitute supply and basic supply.

Vocabulary 

short-notice cancellation / termination – (die) kurzfristige Kündigung

basic supply – (die) Grundversorgung 

a huge burden – (eine) große Belastung 

to react to something – auf etwas reagieren 

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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UKRAINE

Russian gas stop will spark ‘food price hikes and supply issues’ in Germany

Germany could see its supplies of vegetables and other food products affected in the event that Russia turns off the gas taps - but the overall supply will remain secure, the Agriculture Minister has said.

Russian gas stop will spark 'food price hikes and supply issues' in Germany

Cem Özdemir made the comments in a response to a parliamentary question by the CDU/CSU on whether the country was prepared for a sudden halt in gas deliveries from Russia.

“Many companies in the agricultural and food industry are absolutely dependent on the supply of gas in order to be able to produce food or animal feed,” according to the statement by Özdemir, which was obtained by the Rheinische Post newspaper.

“In the event of a halt in natural gas supplies from Russia, further price increases as well as bottlenecks in the supply of individual foodstuffs are to be expected.”

According to Özdemir, gas supply issues would mainly affect crops of vegetables, which could include things like aubergines, cucumbers and peppers. The supply of house and balcony plants grown in greenhouses could also be affected. 

However, there could also be an impact on other agricultural businesses such as dairy and meat farms, as well as mills and bakeries.

Overall food supply ‘secure’ 

In recent months, supermarkets in Germany have been regularly hiking up their prices as they complain of increased costs.

So far, the price rises have mainly been noticeable in the meat and dairy aisles, with sausages, butter and sour cream all among the products affected. 

However, panic-buying also led supermarkets to run low on products such as cooking oils and flour as people speculated about disrupted supplies in the early weeks of the Ukraine war.

Russia and Ukraine are both major exporters of wheat, while Ukraine is a major supplier of sunflower oil.

Food suppliers and politicians have repeatedly urged consumers to avoid stockpiling items they think could run low as they play down fears of potential shortages. 

Food fair Cem Özdemir

Agriculture Minister Cem Özdemir (Greens) speaks at the opening of a food fair on April 26th, 2022. Photo: picture alliance/dpa | Marius Becker

READ ALSO:

At present, the Ministry for Agriculture doesn’t believe that potential bottlenecks are likely to affect the country’s overall food supply. 

“The supply of food in Germany continues to be secure,” the statement from the ministry said. 

The government currently assumes that the total supply of gas “can be physically ensured until the end of summer or the beginning of autumn 2022 in the event of a sudden and prolonged stoppage of all Russian gas imports”.

If the supply of vegetables and ornamental plants is affected, this could be compensated for with supplies from other EU countries, the ministry said.

However, consumers may have to contend with further price rises in the supermarket. 

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