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How Much Cost Plus is in German Network Charges

Author

Listed:
  • C. Müller
  • H. Weight

Abstract

The 1998 Energy Act liberalised the German Electricity Supply Industry. Unlike all other EU Member states, Germany opted for negotiated network access, which was manifested in the so called Verbändevereinbarungen. According to these rules, German network charges should be cost plus calculated and subject to ex post control by the Cartel Office, which is hardly enforced in practice. In the paper three basic tests are applied to find out whether German network charges follow a cost plus principle or whether strategic concerns of incumbents dominate the network charge calculation. Although the results are not unambiguous, it seems that ‘‘cost plus’’ is only a label and not the true nature of German network charges.

Suggested Citation

  • C. Müller & H. Weight, 2006. "How Much Cost Plus is in German Network Charges," Competition and Regulation in Network Industries, Intersentia, vol. 7(1), pages 49-63, March.
    • Handle: RePEc:sen:journl:v:7:i:1:y:2006:p:49-63
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