EU investigates German industry's energy discounts

The EU Commission has launched a formal probe into energy price cuts granted to so-called energy-intensive industries in Germany. EU regulators suspect a breach of anti-trust rules to the detriment of German consumers. Exemptions from paying network charges granted to large electricity consumers in Germany, might distort competition within the EU single market, the European Union's executive Commission said Wednesday as it launched a formal probe into German energy pricing. In a statement, the EU regulators said it would examine carefully if the exemptions were justified on common interest grounds and, if so, whether this could outweigh the negative impact on competition.As Germany switches from nuclear power to renewable energies, the government in Berlin has exempted so-called energy-intensive industries from paying charges for maintenance of the electricity network. Industry lobbies had complained that the country's rising energy costs, brought about by massive investments in green energy, undermined the competitiveness of industries that use a lot of energy. In latest available figures dating back to 2011, some 202 German firms, including steelmakers and the chemicals industry, were exempt from paying network charges. For 2012, the government estimated the cost reductions to amount to 440million euros ($573 million), out of which full exemptions alone were expected to be worth 300 million euros. The reductions are rolled over to ordinary Germans' electricity bills. The probe was based on complaints from consumer advocacy groups, energy companies as well as from citizens alleging the exemption constituted unlawful state aid, the EU regulators said. However, the opening of the investigation did not in itself prejudge the outcome, they added, inviting the government in Berlin as well as concerned parties to file comments on the issue.