Decision on electricity and gas concessions: Grid usage fee and grid connection forecasts as selection criteria

As part of a gas concession selection procedure in accordance with Art. 46 et seq. German Energy Industry Act (“EnWG”), a local authority demanded as a selection criterion the submission of price sheets with (plausibly) forecast network usage fees for the concession area for a specified period and the submission of (plausibly) forecast network connection costs for the same period. The municipality planned to give preference to applicants who could promise the lowest possible grid usage fees and grid connection costs.

Such a selection criterion violates Union law – bidder challenged such approach

One bidder challenged this in court, arguing that the municipality’s selection criterion violated mandatory requirements under EU law, which stipulate that an independent regulatory authority is responsible for grid fees and grid operation conditions.

The underbidding competition administered by the municipality regarding the level of future local grid fees was taking place alongside the grid fee regulation by the regulatory authority with a different objective. Furthermore, it undermined its effect and was thus contrary to the sole regulatory responsibility of the independent regulatory authority responsible for regulating fees, as determined by EU law. 

Karlsruhe Higher Regional Court: The lowest possible forecast grid usage fees and grid connection costs are permissible as a selection criterion

In its decision of June 12, 2024 - 6 U 222/23 - the Karlsruhe Higher Regional Court has now decided that it is not contrary to the provisions contained in the Gas Directive, Directive 2009/73/EC of 13 July 2009 concerning common rules for the internal market in natural gas (OJ L 211/94), for municipalities to take into account the lowest possible forecast grid usage fees and grid connection costs in the concession area in favor of the bidder when selecting the concessionaire (also in conclusion Stuttgart Higher Regional Court, decision of November 9, 2022 - 2 U165/22, unpublished; Stuttgart Regional Court, decision of July 5, 2022 - 51 O 130/22, unpublished; left open Stuttgart Regional Court, decision of July 14, 2022 - 35 O 63/22 KfH, unpublished).

EnWG required municipalities to include comparable selection criteria in concession selection procedures

Due to the objective stipulated in the EnWG to work towards an inexpensive grid-bound supply of electricity and gas to the general public as part of concession selection procedures, the municipalities are, in the opinion of the court, rather called upon to include comparable selection criteria in their concession selection procedures.

The decision described above now provides local authorities issuing tenders with greater legal certainty in dealing with this objective. If you have any questions in connection with electricity and gas concession selection procedures, please do not hesitate to contact us.