Bundeskartellamt facilitates marketing of electricity by Evonik Steag Clearance of acquisition of Steag by municipal utilities in the Ruhr area

The Bundeskartellamt has closed a proceeding against Evonik Industries AG and RWE AG, which it had initiated on suspicion of anti-competitive reimbursement clauses in electricity procurement contracts, after the two companies had declared the respective clauses invalid.

Andreas Mundt, the President of the Bundeskartellamt, stated: "The unhindered marketing of electricity generating capacities by Evonik Steag as an independent player is an important contribution to stimulating competition on the production market and improving market structure. Through our intervention additional generating capacities of approx. 1500 megawatts will be made available in future for marketing to third parties."

In the course of its sector inquiry into the electricity wholesale sector, the Bundeskartellamt became aware of the existence of anti-competitive clauses in capacity provision contracts between Evonik Steag GmbH and Evonik Power Saar GmbH (as suppliers) and RWE Power AG (as customer). In these contracts Evonik had undertaken to hold available a certain amount of power generating capacity for RWE. A critical element of the contracts was Evonik's obligation to repay RWE for so-called capital service costs if electricity was marketed to third parties. RWE had paid the capital service costs as part of the cooperation with Evonik as a financial consideration for the provision of generating capacity. The compulsory repayment obligation had the effect of hindering Evonik in its free marketing of electricity capacities to third parties. After opening the proceeding the Bundeskartellamt was able to persuade the two companies concerned to declare the clauses in question invalid.

Subsequently, RWE has also stated that it will not exercise its option to extend its procurement of electricity from Evonik power stations in the Saarland and the Ruhr beyond 2012. Consequently substantial capacity will be available in future from the Evonik power stations for marketing to third parties.

Acquisition of Steag by municipal utilities in the Ruhr area does not raise any competition concerns
Yesterday the Bundeskartellamt also cleared under merger control the acquisition of 51% of the shares in Evonik Steag GmbH by Kommunale Beteiligungsgesellschaft GmbH (KBG). Partner companies in KBG are the municipal utilities Dortmunder Stadtwerke AG, Dortmunder Energie- und Wasserversorgung GmbH, Stadtwerke Bochum GmbH, Stadtwerke Duisburg AG, Stadtwerke Essen AG, Stadtwerke Dinslaken GmbH and Energieversorgung Oberhausen AG. The merger project did not raise any competition concerns.

Andreas Mundt: "The participation of the Ruhr municipal utilities in this project can help Steag to establish itself as a market player independent of the major four power generating companies".