Stadtwerke Gießen AG (SWG) welcomes the judgement of the Federal Court of Justice (BGH) in Karlsruhe on the application of Section 315 of the German Civil Code (BGB) when reviewing gas prices. In its judgement handed down on 13 June, the court confirmed the fundamental applicability of the provision of Section 315 of the German Civil Code (BGB) to gas price increases. However, the court determined that the obligation of the supply company to disclose the calculation does not go nearly as far as the German consumer protection organisations had previously demanded. If the utility company proves to its customers that it has merely passed on increased purchase prices in the price increase in dispute, this is proof of the fairness and appropriateness of the price. The Federal Court of Justice considers price increases in which only increased procurement costs are passed on to the customer to be the exercise of a legitimate interest on the part of the supply company. These price increases do not change the relationship between service and consideration that both parties to the contract considered to be balanced when the gas supply contract was concluded. The customer is fully obliged to pay the higher gas price and can be sued for payment by the supply company in the event of continued refusal to pay. Stadtwerke Gießen is also pleased with the judgement. "For us, this decision by the Federal Court of Justice is a complete success," explains Martina Gießler, Legal Counsel at Stadtwerke Gießen AG. "We were of the opinion from the outset that the price review in accordance with Section 315 BGB can never relate to the entire calculation on which the price is based. Rather, the gas supplier's duty of disclosure derived from the judgement is limited to the price increase in dispute. It is also pleasing that the Federal Court of Justice considers the passing on of increased procurement costs to the customer to be a legitimate defence of interests by the supplier, with the result that the increased gas price thus formed is cheap and reasonable." Ina Weller, Head of Marketing at SWG and in this function responsible for determining SWG's sales prices, confirms: "We can prove the increase in our procurement prices. That's why we will now be contacting the customers who have lodged an objection to our gas prices once again."
At the same time, Gießler and Weller hope that the occasional blanket accusations of unfair pricing policies will now come to an end. "An independent report by an auditing company confirms that Stadtwerke Gießen has always taken the interests of its customers into account when setting prices. The report states that we have raised our gas sales price less than our gas procurement costs have risen. This means that our gas price is in any case cheap and reasonable according to the new supreme court judgement."
Background to Section 315 BGB
Consumer advocates have long accused gas suppliers of increasing their end customer prices "unfairly", i.e. arbitrarily, capriciously, unreasonably and solely on the basis of a dominant market position. Based on Section 315 of the German Civil Code (BGB), they argue that the gas suppliers' invoices are not binding and therefore not due for payment. With this argument, consumer associations suggest that customers should not pay the increase at all or only pay the old price plus a security surcharge of two per cent. In another variant, consumers are called upon to pay the invoice amount including the increase, but to make the increase portion subject to later reclaim.
Price trends in competition
"Incidentally, SWG's prices are really favourable in comparison," says Weller. "Our customers can trust us as their local supplier. The gas price comparison published by the Federal Cartel Office at the beginning of the year is proof of this. Here, the prices of Stadtwerke Gießen are in the most favourable third of suppliers nationwide. Our partnership with the people in this region is reflected not least in the fact that we offer each of our customers a high level of advice and expertise at our infoCentre on Giessen's market square. Here we have both competent energy experts and information material available all year round. So if you want to save money, the infoCentre is the right place for you."