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Interview - German cartel office keeps pressure on utilities

The German cartel office, the country’s anti-trust watchdog, kept pressure on Germany’s four largest utilities, saying it remains committed to its plan of large suppliers lowering their stakes in local providers.

“I still expect that there will be results,” the president of the cartel office, Bernhard Heitzer, told Reuters in an interview on Monday. The comments come as the government seeks to lower the market share of utilities such as E.ON and RWE that dominate the power market with their production and transportation facilities. Asked what steps he could take to achieve that target, Heitzer said: “In theory, they could give up (the stakes) voluntarily.” He declined further comment.

Heitzer has said since December that forcing utilities to lower their shareholdings in local utilities in Germany is the fastest way to get more companies to offer energy on the market. “It remains on our agenda to give more suppliers the possibility to become active on this level” of the market, he said on Monday. Citing company sources German’s Manager Magazin reported in February that E.ON was in talks to sell Thuega, its holding company for local utility shareholdings. The wholly owned unit, which groups stakes in around 120 local and regional energy production and distribution companies, might be sold to a group of six utilities led by Mannheim-based MVV and RheinEnergie of Cologne, Manager Magazin reported then.

E.ON CEO Wulf Bernotat has declined to comment on the company’s plans for Thuega. The cartel office plans initial decisions by the end of the year on a case it opened against 35 gas distributors it suspects of charging inflated gas prices. One case has already been dropped and it is evident that companies had to pay more for the gas they bought on wholesale markets, Heitzer said.

The cartel office is investigating companies belonging to E.ON, RWE, EnBW and Vattenfall on suspicion that the companies were abusing a dominant market position. The companies argued they had to raise prices as they had to buy gas at higher rates from wholesalers, while the cartel office argued they were only able to do so because there was not enough competition. (Reuters)