Successful conclusion of abuse proceedings against electric heating providers Electric heating providers promise to implement measures to open the market and reimburse their customers to the tune of € 27.2 million.

The Bundeskartellamt has successfully concluded the abuse proceedings it initiated in the autumn of 2009 against 17 providers of electric heating. The companies concerned and a number of other electric heating providers have promised the authority that they will implement extensive measures to open up the market. In addition, 13 providers are to pay out reimbursements to their electric heating customers. Approx. 530,000 customers can therefore expect to receive financial compensation amounting to € 27.2 million in total.

The electric heating market covers the supply of electricity for night storage heating and electric heat pumps. In Germany just under two million households (approx. 4 % of all homes) use electricity as a form of heating. The providers are practically without competitors in their respective supply areas. In contrast to the market for "normal" household electricity there are a number of barriers to entry for newcomers and so far no possibility for consumers to switch supplier.

In the course of the proceedings which have now been concluded, all the companies promised to implement the following measures to open up the market:
• transparent publication of electric heating tariffs in the Internet;
• establishment of temperature-dependent load profiles by the network operator;
• transparent publication of load profiles in the Internet by the network operator.

In addition, the companies have undertaken to apply the low concession fee of currently 0.11 ct/kWh applied so far to special contracts to all supplies of electric heating. Depending on the supply area, this will further ease the burden on consumers of electric heating.
The President of the Bundeskartellamt, Andreas Mundt, stated: "With these structural improvements it will be much easier for alternative providers to enter the electric heating markets. The Bundeskartellamt hopes that this will stimulate competition and provide possibilities for the consumers to switch provider in the future."

The Bundeskartellamt examined 18 electric heating providers and 7 low-cost comparable companies to compare revenue and costs from 2007 to 2009, covering more than 70 % of the electric heating supplied to private customers. The proceedings against Entega GmbH & Co. KG are still pending. All other 24 companies as well as others falling under the competence of the Bundeskartellamt have pledged to implement structural measures to open up the market.

The Bundeskartellamt's analysis has shown that some electric heating providers achieve comparably moderate profit margins and that also according to the efficiency standards of the Bundeskartellamt some of them even carry cost deficits. Those providers that have proven to be comparatively expensive in the examination have promised to financially compensate their customers. This will be done either in the form of credit amounts in the customers' next bills or the non-implementation of price increases necessitated by rising costs.

In spite of rising costs for the incoming supply of renewable energy, many electric heating providers have not raised their prices in 2010, not least with regard to the ongoing proceedings. The costs which have not been passed on currently amount to at least € 20 million for 2010. However, as a high increase in EEC costs is expected in the coming year, electric heating costs are likely to rise in 2011.

A table of the companies concerned can be found here. A detailed overview of the market and report on the respective proceedings is available here (German version).