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ENERGY

German politicians reject calls to turn off households’ gas first in emergency

The head of the Federal Network Agency - as well as German politicians - have dismissed calls for households to have their energy turned off first if Russia decides to withhold gas.

Flats in Stuttgart
Apartment buildings in the centre of Stuttgart. Photo: picture alliance/dpa | Marijan Murat

In an interview with German regional newspaper, the Rheinische Post on Friday, Klaus Müller rejected demands for industry to be given preference if gas deliveries from Russia are cut off.

Slamming the idea of turning off the tap for households, Federal Network Agency boss Müller said that different interest groups shouldn’t be played off against each other. 

“The question of what I can or must do in a gas emergency at home to save gas, CO2 and money so that our country as a whole comes through the crisis well – that is a legitimate question,” he said. “But it applies equally to industry and private consumers – no group should be played off against the other.” 

Currently, the supply of energy for private households is protected by law in the event of an emergency, but with concerns growing that Russia could use energy supplies to Germany as a weapon, industry heavyweights are calling for a change of priorities.

In an interview with Manager Magazin on Thursday, Eon Supervisory Board Chairman Karl-Ludwig Kley called on politicians to think about reversing the order of its emergency plan and shutting down private consumers before industry.

Kley said the entire national economy, and with it people’s incomes, depended on industry remaining able to work, adding that it made sense to prioritise business along with critical infrastructure like hospitals. 

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‘Out of order’

Politicians from the conservatives (CDU and CSU) and Social Democrats (SPD) also lined up on Friday to reject Kley’s proposals for companies be supplied with the remaining gas reserves for longer than private households.

“The economy must be there for the people and not the other way round,” SPD politician Ralf Stegner told Bild. “Demands to change the prioritisation of gas are completely out of order.” 

Andreas Jung (CDU), member of the Bundestag Committee for Climate Protection and Energy, also rebuffed the proposals.

“There must be another sensitive discussion about where which savings are justifiable,” he said. “But one thing is clear: nobody should freeze, and private households need special protection.”

Speaking to the Rheinische Post, Michael Hüther, head of the Institute of the German Economy (IW), warned against cutting off private households before industry in the event of a gas supply freeze.

“I understand the concern to supply industry with gas as long as possible,” he said. “But it is not for legal reasons that households are considered protected customers.

“Switching off households would also be linked to safety issues: above all, it would also not even be possible for the grid agency to safely plan a mass disconnection in advance.”

READ ALSO: ANALYSIS: How badly would a Russian gas embargo hurt ordinary Germans?

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

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Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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