Electricity and gas: primary care clients pay 1.15 billion euros too much

Consumers of what is called universal service pay about 1.15 billion euros a year too much for their energy. The result is a study by the Friedrich Ebert Foundation (FES), which compared basic care rates with the average prices of other providers. The survey, available to SPIEGEL, should be published early next week.

More in SPIEGEL

Number 3/2019

Now, it's personal: How pirates and trolls destroy politics and society

A basic supplier is legally obliged to provide electricity and gas to all consumers who do not switch to another energy supplier. Some do not do it by inertia, others are not taken over by a new provider because of a bad credit rating.

The universal service covered about 31% of electricity consumption and 22% of gas consumption in 2016. The suppliers are mostly large energy companies such as RWE and Uniper. Basic suppliers can make their prices largely free and cancel high margins, according to consumer advocates.

"Ironically, socially vulnerable people are sometimes abused for milking cows," says Udo Sieverding of the North Rhine-Westphalian Consumer Center. Core suppliers themselves claim that the high prices are a consequence of increased legal costs and defaults in this market segment.

Possible measures against excessive prices

In order to ease the burden on consumers, the FES calls for universal service to be announced in the next public procurement cycle in July 2021. It would no longer be possible for the company with the largest number of customers in an area of given network automatically becomes the basic provider, as it was the case before, but the company offering the most advantageous offer.

Consumer advocate Sieverding considers this approach too costly. "Such a call for tenders would only benefit novice customers in basic services," he said. "It would take a long time to relieve a significant number of consumers." The weak effect would be offset by a significant bureaucratic effort and potential for considerable political conflict.

Roughly, it is positive to look for ways to lower prices in the universal service, said Sieverding. Consumers with a good credit rating should switch to a cheaper provider as soon as possible anyway.