Gasag boss Georg Friedrichs wants to convey security. “There is enough gas to keep the Berliners’ heaters warm,” he says and promises: “We will deliver.” But that will be expensive. After the company had raised the prices for its 400,000 Berlin gas customers by 16 percent just two months ago, Gasag is now asking for more. From May 1, a kilowatt hour of gas will cost 10.92 instead of 8.46 cents. That is an increase of 26 percent. In December, the Gasag customer had paid 7.15 cents.
For Berlin’s largest gas supplier, the price increase in January was the sharpest increase in years. Never since the liberalization of the gas market in 2007 had a kilowatt hour of gas cost eight cents, and now the ten cent mark has even been exceeded. With an annual consumption of 12,000 kilowatt hours, which according to Gasag corresponds to the needs of an average apartment in Berlin, this results in additional costs of 295 euros per year. In a detached house with an average consumption of 20,000 kilowatt hours, the annual costs even increase by almost 500 euros. The effects of the war in Ukraine have arrived in Berlin.
Price increases by more than 500 percent within one year
Because it is increased wholesale prices that Gasag uses to justify the price increase. While company director Friedrichs had still assumed in November that the prices, which had already risen sharply at the time, would fall again, if only “at best to 30 to 40 euros, but certainly not further”, his company now refers to increases of “more than 500 percent”. within a year.
In fact, the cost of 1,000 kilowatt hours of gas had increased at least sevenfold over the past year alone, from around 20 to more than 150 euros at times. After that, the price dropped to around 80 euros at the beginning of this year, but then came the war. Three days before Russian troops invaded Ukraine, a megawatt hour of gas cost 77 euros, but more than 200 euros had to be paid at the end of last week.
imago images/Matthias Koch
A Berlin company
The Gasag was founded in 1847 as a municipal gas works in Berlin. Today, the company is the largest gas supplier in the city, also offers green electricity and operates the 14,000 kilometer Berlin gas distribution network. Gasag is owned in roughly equal shares by the energy companies Vattenfall, Eon and Engie from France.
boss of the company has been Georg Friedrichs since April 2021. The 53-year-old lawyer came from Vattenfall at the time. Gasag employs around 1,500 people.
As a result, it was not only at Gasag that prices were higher. “In the past five months, all of the around 700 basic gas suppliers in Germany have adjusted their prices at least once,” says Lundquist Neubauer from the energy price comparison portal Verivox. In January, prices rose by an average of 28 percent, in March by 57 percent and by 40 percent in April. Neubauer expects the next wave of inflation on May 1st in a few days, as providers are obliged to announce price increases six weeks in advance. Then the current consequences of the war will also have an impact on gas prices.
Gasag is expected to remain below the average price increases. Since large amounts of gas were bought early at lower prices, the currently high wholesale prices do not have to be passed on to customers in full, explains the company, which is owned roughly equally by Vattenfall, Eon and the French energy supplier Engie. The requirement until December 31 of this year is completely covered. “A large part of the requirement for 2023” is also secured in terms of price. Gasag boss Friedrichs does not want to give any price guarantees: “If prices continue to develop like this, we will discuss prices again next winter.”
But the price increase that has now been announced will hit many customers hard. Gasag wants to support low-income households in a targeted manner. “We don’t want gas blockades to increase in the city,” says the Gasag boss. Temporary deferrals should be offered, as well as agreements with job centers and district offices in order to quickly secure state support options. However, it is important for affected customers to contact customer service. “Talk to us. We’ll find a way,” said Friedrichs. Last year, 1,703 gas connections were switched off in Berlin due to late payments.
At the same time, the company wants to abolish the new customer tariff introduced in December 2021 in the replacement supply. According to this, Gasag had demanded 18 cents per kilowatt hour from customers who no longer received gas from their previous supplier and had to be supplied by Gasag as a compulsory supplier. Gasag had brought this considerable criticism and certainly some loss of image. In fact, as a result, customers had to pay monthly bills of up to 1000 euros. We had reported.
Whether Gasag can continue to deliver, as its boss is now promising, is also a question of availability. On average, ten million cubic meters of gas are needed in Berlin every day. Gasag supplies almost seven million cubic meters of this, about half of which comes from Russia and for which a mid-single-digit million amount is transferred there almost every day. According to Gasag, the gas has so far flowed unabated via the Ukraine pipeline and Nord Stream 1. But what if Russia stops exporting or Germany stops importing?
In the event of a significant shortage, the gas emergency plan would be activated nationwide and the Federal Network Agency would control gas distribution in Germany. The authority could then have large consumers in industry taken off the grid. However, private households, hospitals and public facilities would have to be supplied in any case.
With the increased purchase prices, however, the question also arises as to whether or when Vattenfall will raise prices. The company supplies around 1.3 million households in the city with district heating and hot water, runs six of its nine Berlin power plants with natural gas and needed a total of 1.3 billion cubic meters of gas last year. However, Vattenfall did not want to comment on a corresponding request.