Germany salvages companies' power discounts

AP News
Posted: Apr 08, 2014 2:05 PM

BERLIN (AP) — Germany said Tuesday that it will reduce the number of companies allowed to receive discounts on their electricity bills as part of an effort to satisfy European Union concerns.

The changes will decrease the number of companies largely exempted from a surcharge placed on consumers' power bills and used to promote renewable energy — something that is important as Germany weans itself off nuclear power.

The EU's Executive Commission in December started investigating as to whether the discounts — mostly given to large industrial companies — violate EU rules on state aid. That investigation raised concerns in Berlin that companies could see their costs rise and their competitiveness hurt.

Economy and Energy Minister Sigmar Gabriel said Tuesday that Germany has now completed talks with Brussels and is certain that adjustments to the system will mean it complies with EU rules.

Until now, around 2,000 companies were largely exempt from the surcharge. The number receiving full discounts will now drop by about 400, Gabriel said, with the exemptions focusing on those which "face international competition and have very high energy costs."

"This is not about lobbying for industry; it's about hundreds of thousands of jobs in this country," said Gabriel, who is also vice chancellor.

The move came as Chancellor Angela Merkel's Cabinet signed off on a wider plan by Gabriel aimed at stemming the rising costs of Germany's transition to renewable energy and improving its coordination. The country plans to switch off its remaining nuclear reactors by 2022.

Gabriel says he aims to keep energy prices stable at least until 2017. His plan, which needs parliamentary approval, foresees trimming subsidies for some wind-power facilities.