Wednesday , November 25 2020

Where consumers pay twice – News Economy: Companies



If you live in a village in Zurich, electricity is supplied relatively cheaply to your home. In most places, a four-person household pays an average of 270 CHF per year for network fees. The supplier is a non-profit cooperative, Elektrizitätswerke der Kantons Zürich (EKZ).

Not in the Canton of Bern. In 205 municipalities that receive electricity from the BKW listed power company, the same electricity supply costs about 520 francs in fees – almost twice as much. This huge difference makes us suspicious because, in accordance with the law, distributors of energy can only charge "costs to pay". In other words: Berne BKW in Bern would have to be able to prove almost twice as much in the accounting network as ECC.

This is not the case, says an anonymous employee who worked for many years at the federal level. The main reason for such large differences depending on the community is the so-called synthetic assessment of the power grid. Synthetic means artificially created. Similarly with this method. It is not based on invoice documents, but on artificial calculations. This means that you can manipulate them: "Theoretically, network costs are not negotiable," says the expert, "but some suppliers make their network accounting more profitable in their favor than it should."

A trick from 2008

Why this is happening and how much it can affect, explains the intruder. "When the new law came into force in 2008, some energy companies have modernized their network and billed households for investments that have long been paid for by electricity tariffs, which is why some communities are at risk of double network." I want to remain anonymous because I work for such electricity suppliers.

The numerical example helps to understand his statement: 40 years ago, in 1967, the operator invested 40 million francs in power lines. He is expecting a 40-year-old life. Investments lose 1 million value each year. This loss of value, the so-called copier, the operator burdens households. In 2007, the network would have to be zero, as would the net tariff.

But then came the year 2008, a new law on electricity supply comes into force. Allows a new network evaluation. Facilities that will operate for the next 20 years, but have already been repaid, can now be artificially evaluated. The network is worth 20 million francs again. Every year, 1 million are written off. The supplier may, for the second time, charge this validation with the electricity tariff.

Enlarge the graphic

"It is true that electricity consumers have paid infrastructure for a second time in certain places," confirms Elcom. She was aware of the problem. This authority annually checks the network accounts of 640 suppliers in Switzerland. "It is possible that in the past already depreciated networks have been reactivated and lost again," he says. The Office confirms the impact of the artificial assessment on the electricity tariff: "A significant part of the differences in network fees among suppliers can be explained by the revaluation of the new law in 2008. They are the result of a synthetic assessment of the network." Companies that have significantly improved have higher network rates; Companies that charge real investments and expenses have low rates, "said Elcom.

Significant impact

The impact of synthetic network accounting has been demonstrated by the initial example of the low-cost ECC in Zurich compared to the expensive Berner BKW. ECC almost do not use synthetic accounting. This applies to "less than one percent of investment" – says the cooperative. BKW is different. She claims that she "made a synthetic assessment of some assets", which she does not disclose. But according to the second source, "the high network tariff of BKW is largely the result of a synthetic assessment".

BKW rejects the call. Instead, it justifies, and with it other suppliers, network tariffs with high construction costs. Municipal energy companies claim that the construction of the line there is expensive because you have to tug roads and concrete channels. For example, IWB answered in Basel. Rural energy companies say they had to spend a lot of money on several households. Unstable weather makes maintenance and repair expensive, says Bern BKW. Therefore, their network fee must be relatively high.

She emphasizes that her network accounting is legal. "We did not appreciate the value of BZW's assets that were audited by Elcom and are lawful.» The authorities do not comment on an individual case, this has prohibited its right.


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The federal government wants to open the electricity market. Private households should also be free to choose their electricity supplier in the future. Video: SDA


The agency claims that after the entry into force of the new act, in 2008 she tried to limit the practice of artificial revaluation. "Elcom has taken a more restrictive approach to network assessment in the past," he says. But then came BKW, challenged this approach and won. "The federal court did not comply with Elcom's approach, as indicated by the verdict of July 2012. It is possible that the existing depreciated networks can be reactivated and re-written" – said the superior.

BKW is not an isolated case. Said insider says that the assessment of the network leaves much room for maneuver. "Almost everyone optimizes their calculations." The power was largely powerless because the monitor would know much more about their accounting than supervision. This also confirms Elcom. The asymmetry of information lies in the nature of things: "It is a well-known, basic economic problem."

«The network as a type of dairy cow»

The tariff for using the network is "largely dependent on the company and owners". For some, "thinking about public services is the most important thing". For others, this is a phrase: "Some owners strive to maximize profits and perceive the network as a type of milk cow," says Elcom spokesman Simon Witschi.

This applies not only to villages but also to cities. Network tariffs would have to be significantly lower in many places than at present, because in the city high costs for the production line are spread over many connections. This is due to the following comparison: in Bern or Wetzikon, a four-person household pays 321 francs net per year, whereas in Winterthur it has to pay 440 francs – a quarter more. It is hard to imagine that the construction of the Winterthur line is 27 percent more expensive than in Bern. So other reasons must be price driving.

Deputy director of the International Energy Agency, Paul Simons, said in October that Swiss households and companies "pay a high price due to high inefficiency". The person mentioned above can not see any solution for now: "There is a lot of fog in the electricity grid and it will probably stay that way."

(Editorial Tamedia)

Created: November 4, 2018, 19:37


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