Since the beginning of the year, one topic has repeatedly dominated the headlines in the media: rising energy prices in all regions of Germany. The reason: the energy markets are in a constant state of flux. Rising global demand, particularly in industrialised countries, for environmentally friendly natural gas is driving up prices. Due to Germany's high dependence on imports - more than 80 per cent of the natural gas consumed in Germany has to be imported - the rising world market prices can hardly be cushioned. They have an indirect effect on household prices for natural gas via the rising procurement costs of the supply companies. "We in Giessen are also feeling the effects of rising prices on the global energy markets. They have an impact on the procurement costs for our company. Against this background, we are once again forced to raise the prices for natural gas and district heating as of 1 October 2006," explained Manfred Siekmann, CEO of Stadtwerke Gießen AG (SWG). "We have to keep an eye on the economic situation of the company. SWG has already kept the prices for electricity, gas and heat constant since January of this year. If we were to forego the price increase that has now become necessary, we would be seriously jeopardising SWG's economic stability," Siekmann continued.
SWG and customers are in the same boat
"What is currently happening on the energy market is serious. Prices are continuing to rise across the board. Worse still, stabilisation is not yet in sight. For me, this is a clear sign that the liberalisation of the energy markets has achieved little so far. The large corporations and producers are cashing in, while local suppliers such as municipal utilities still have their hands tied in competition. And so we are in the same boat as our customers and can only moan about prices continuing to rise," says Ina Weller, Head of Marketing at SWG, venting her anger.
New prices for gas and heat from October
In the gas supply sector, both the labour prices in the general tariff and the labour prices of the heating tariffs will rise by 0.61 cents per kilowatt hour (kWh) including all taxes. The basic price remains constant. For an average customer on the general tariff with an annual consumption of 3,000 kWh, the price increase means an increase of 7.41%. This corresponds to an additional monthly charge of 1.53 euros. A customer who heats with natural gas and consumes 30,000 kWh per year will pay 15.25 euros more per month from October - an increase of 10.80 %. SWG will also be increasing its district heating prices on 1 October. Here, the labour prices will rise by 1.06 Ct/kWh including all taxes. The annual output price, which is payable per kilowatt of output provided, will remain constant. This means that customers with an average annual consumption of 22,500 kWh (single-family home) will pay €19.88 more per month in future, which corresponds to an increase of 13.29%.
Electricity price increase planned
The municipal utilities are also planning a price increase for electricity as of 1 January 2007, but it is not yet clear how high the price increase will be for electricity customers. But even after the price increase, SWG will not need to shy away from comparison with other electricity suppliers. With an annual consumption of 4,500 kWh, SWG electricity customers who use the PowerPack Private electricity supply contract will pay €789.75 per year at current prices. Customers who currently have an electricity supply contract with Yello pay €70.20 more per year for the same amount of electricity.
Efforts to achieve favourable gas prices
Stadtwerke Gießen has already reacted to minimise its dependence on the major gas suppliers. This includes the fact that SWG has released itself from long-term and comprehensive contracts in order to be able to purchase gas freely and from various suppliers on the market. The aim of SWG was to be able to achieve more favourable prices for gas purchases through this measure. The efforts of SWG's energy purchasing department to obtain more favourable conditions have so far been unsuccessful. "We deeply regret this. " said Siekmann, "and we realise that we cannot escape the developments on the international energy markets. But we are calling for more competition for all gas supply companies. Through more flexibility, we want to achieve price advantages that benefit our customers."
Oil and gas prices are still fixed
The price of natural gas is still orientated towards the most important competitive energy, crude oil. This link is a fundamental component of supply contracts for natural gas in Germany. If the price of oil rises, the price of natural gas follows this trend. However, the principle also applies in reverse: a falling oil price results in a lower natural gas price. The price is generally adjusted with a delay of several months. This cushions extreme oil price fluctuations.
Customers can submit meter readings
SWG's gas and district heating customers do not necessarily have to read their meters on 30 September 2006. This is because the supplier calculates consumption before and after the price increase using characteristic curves. However, anyone wishing to read the meter themselves and inform SWG can do so on the Internet at www.stadtwerke-giessen.de or by calling the service hotline on 0180 22 11 100 (Monday to Friday from 7.00 a.m. to 7.00 p.m.). The amount of the monthly instalments will not be automatically adjusted due to the price increase. If customers want to avoid higher additional payments, SWG recommends calling the service number.
SWG offers advice on saving energy
There is still a great deal of energy that can be saved in almost every household. Customers who would like to find out where they can actually make savings can take advantage of SWG's energy advice service at the infoCentre on Marktplatz. The infoCentre is open Monday to Friday from 9:00 to 18:00 and on Saturdays from 9:00 to 14:00.