Minister Lemke: "Mass terminations of electricity contracts, some of which are probably illegal"

To protect against extreme jumps in electricity prices, Federal Consumer Protection Minister Steffi Lemke (Greens) has announced that new rules will be examined.

"The federal government is monitoring the behavior of market players very closely and is examining possible regulatory steps," said Lemke in Berlin.

The consumer centers have already sent several warnings and announced more.

"We are currently dealing with price surcharges that are driving up the price of electricity to up to 90 cents per kilowatt hour," said Lemke.

"This can in no way be justified by what is happening on the market." Economics Minister Robert Habeck (Greens) had previously announced that he would review the liberalized gas and electricity markets.

The background is that many low-cost providers have experienced turbulence and thousands of contracts have been terminated.

In view of the increased prices for electricity and gas on the exchange, they are often no longer able to meet their obligations to cover their costs due to the lack of long-term contracts.

The energy expert of the Federal Association of Consumers, Thomas Engelke, said: "In spite of contractual agreements, numerous electricity and gas providers have withdrawn from the market and unilaterally stopped supplying their customers."

“Further warnings are planned”

Minister Lemke again emphasized: "Recently there have been mass cancellations of electricity contracts, some of which are apparently illegal." Consumer advice centers provided comprehensive information on their websites and also provided sample letters for claims for damages.

Consumer advocate Engelke said: "The good news is: Nobody has to be afraid of sitting in the dark or of having to freeze." If low-cost providers have stopped delivering to their customers, they automatically end up with the so-called basic suppliers in the respective municipality.

However, according to Engelke, the basic suppliers then demanded in some cases completely inflated prices from the new customers.

"This two-tier system undermines competition."

Leonhard Birnbaum, CEO of the energy company Eon, was annoyed by the behavior of the electricity discounters.

"They gave up the customers to the basic suppliers, who are now ensuring the delivery, and stole their responsibility," he said.

Existing customers often have to pay extra for new customers.

"You have to think about new rules so that such behavior in the interests of consumers is no longer possible."

According to Lemke, a “certain surcharge” for new customers is to be accepted if consumers fall into the replacement supply from the default supplier and the latter then has to buy electricity more expensively in the short term.

"But I think a tripling or similarly high surcharges are absolutely disproportionate," said the Green politician.

In order to examine possible regulatory steps, "we will also speak directly to the energy industry," said Lemke.

"We will not allow it to be dumped on consumers when cheap electricity providers go bankrupt or terminate contracts en masse."

A spokesman for the Federal Ministry of Economics explained on Wednesday: "The price increase is due to several components." In addition to the procurement costs for gas, electricity prices depended on network charges and electricity taxes, among other things.

Check possible changes.

There are still no statements as to which components something needs to be done.

Taxes and duties are not the only issue.

Consumer advice center expert Engelke demanded: "More transparency and stronger supervision are needed." The fact that some electricity and gas providers have opted for a short-sighted business model is also due to insufficient transparency obligations and insufficient regulation.

"Politics must make consumer protection in the energy market more crisis-proof."

Engelke recommended consumers who have to pay a lot more when automatically switching to the basic supplier to switch to a cheaper tariff.

"However, that is difficult at the moment." The consumer centers offer advice.

"This is also about possible claims for damages."

According to information from the consumer advice centers, there are now seven warnings nationwide and one threat because of the cessation of electricity supplies, the termination of contracts or because of extreme price increases - five of them in North Rhine-Westphalia alone.

"Further warnings are being planned," said a spokesman.