ROUNDUP: Habeck believes price explosions are possible for some municipal utilities

BERLIN (dpa-AFX) – According to Federal Minister of Economics Robert Habeck (Greens), a lack of Russian Nord Stream gas could result in a price explosion at some municipal utilities. But there are other options, said Habeck on Saturday at an event organized by the weekly newspaper “Die Zeit” in Hamburg. Even in extreme cases, private consumers are protected by law from being turned off the gas.

On July 11, Nord Stream begins annual maintenance work, which usually lasts ten days. Then no gas flows through Nord Stream 1. The big concern is that Russia will not turn on the gas tap again after the maintenance.

In order to be able to quantify the risk of a lack of gas, one would have to get into the head of the Russian President Wladimir Putin can look, said Habeck. “But you see a pattern and that can lead to this scenario.” You are dealing with “a quasi economic warfare dispute”. The Russian calculation is in the process of keeping prices high in Germany in order to “destroy the unity and solidarity of the country”. Habeck referred to the beginning of the steps from stopping gas deliveries to Poland and Bulgaria to the current situation.

Germany is trying to react to this with energy-saving campaigns and the use of coal. The next step could logically follow the previous reduction in Russian gas. “The question is: does he really do it?” It can’t be ruled out, affirmed Habeck.

With a view to suppliers such as the largest German gas importer Uniper, who got into trouble, Habeck said: “The companies that now have a lot of Russian gas have a real problem.” They would have to fulfill their supply contracts with public utilities, for example, but they would have to buy gas elsewhere at a much higher price.

There are two options: Either the state supports the companies with tax money. “Or you allow the companies to pass on the prices.” This is provided for in the Energy Security Act, which introduced the so-called car-free Sunday in the 1970s. Discussions were ongoing about a probably needed change in the law.

However, a paragraph that would allow companies to pass on prices outside of the contract has not yet been activated. Because this is “a very, very sharp sword”. The company’s customers would then receive the full price adjustment immediately. “That would mean that for some municipal utilities, which would then have to deal with their customers, you would immediately have a price explosion.” The government is still working on other options “that may not drive the wedge so sharply into society”.

Habeck continues: “But I can’t rule that out either, because if this company were to fail or other companies would fail, it would be like a domino effect that would very quickly lead to a deep recession.” When asked about the alternative options currently being considered, the minister declined to comment.

When it comes to saving gas, the government will initially continue to opt for voluntary measures, said Habeck. If gas saving had to be mandated, it would also depend on the networks. It would then probably be regulated at the expense of those factories that were not part of a mixed network that also supplied protected private households.

A lot of gas is already being saved. With a view to an announcement by the Hamburg outdoor pool operator Bderland that the water temperature would be reduced from 28 to 25 degrees, Habeck said: “If Germany has the problem that the outdoor pools are only 25 degrees, then we really don’t have a problem.”

All in all, the problems can be solved, albeit possibly “with great pain and considerable expense”. Companies dependent on Russian gas would have to reorganize and diversify their supply contracts. “Some didn’t.” Problems in these companies would show up on their balance sheets. competitive disadvantages arise. “The test will come, of course.” The economy as a whole is dependent on companies diversifying./bw/DP/nas

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