Germany's grid fee subsidies failing to reach consumers – media

Germany's 6.5 billion-euro grid fee subsidy to lower household electricity costs is failing to reach many end consumers and distorting competition among energy providers, business daily Handelsblatt reported. 

Grid fees in Germany make up about a quarter of household electricity bills and have risen steeply in recent years. The subsidy, which took effect at the start of this year, was designed to cover part of grid operators' costs. The government expected providers to pass savings on to customers. 

But a loophole in the law means suppliers are only required to pass on reductions "at the time of the next contractual price adjustment," reported Handelsblatt. Providers are offering lower rates to new customers and those on basic supply tariffs, while customers on fixed-price contracts see no reduction until their lock-in period expires, according to the paper. 

The newspaper surveyed six major electricity providers – including E.ON, EnBW and EWE – and found all intended to adjust fixed-price contracts only after guarantees expire, meaning many customers could miss out entirely on the 2026 subsidy window. 

The full extent of the shortfall is unclear, as none of the providers surveyed would disclose how many of their customers are on fixed-price contracts, citing competitive reasons. 

The arrangement has drawn accusations that economy minister Katherina Reiche, a former head of energy company Westenergie, shaped the legislation to benefit the industry, wrote Handelsblatt. Smaller providers, who typically do not offer price guarantees, say the subsidy distorts competition in favour of larger rivals. 

Reiche had previously said she expected the industry to pass savings on to customers in full. The government had already faced criticism for excluding households from an industrial electricity tax cut, despite promising broader relief in its coalition agreement.