VERBUND Welcomes German Court Judgment on Power Transit


VERBUND welcomes the court judgment pronounced by the regional court of Berlin today, Tuesday, according to which VEAG, Eastern Germany’s biggest power grid operator, has to transport 120 megawatt of base load for Leipzig through its grid.

It was VERBUND, Deutsche Tractebel AG and KOM-Strom AG, as new power suppliers of the Leipzig municipal utilities, who had sought the court judgment. The share of VERBUND amounts to approximately 300 gigawatt hours per year; this corresponds to the average consumption of an industrial town with a population of 50,000.

Now the chances for ultimately starting the power supply next fall have increased considerably, if the Leipzig regional court pronounces a similar judgment against the regional supplier "envia", which also impedes the transit.

The Berlin court substantiated the judgment pronounced against VEAG with the argument that the Eastern German " protection of brown coal interest clause " must not be applied generally to prevent other power suppliers from transporting power through the VEAG-grid. Moreover, the judges had rejected the argument brought forward by VEAG according to which VERBUND was not allowed to supply power because the Leipzig public utilities were no approved client in Austria

"We are very pleased that the court shared our view", explained Mr. Hans Haider, Chairman of the VERBUND Board of Management, and Dr. Hannes Sereinig, Member in charge of power trading. "And we hope the forthcoming judgment will also be in our favour."

The Leipzig municipal services had concluded a new power supply agreement inter alia with VERBUND in November 1999. However, delivery as of January 1, 2000 was prevented because VEAG refused the transit.

Its main argument was the so-called protection of brown coal interest clause in the Energy Industry Law, according to which a sufficiently high level of conversion of Eastern German brown coal into electric energy may be taken into account until 2003.

Contrary to that, the German-Austrian supplier consortium held the view that the purpose of the brown coal interest clause cannot be to put the Eastern German economy at a disadvantage through non-competitive power prices. The regional court of Berlin shared this view.