We advise our clients on all fields of energy law including related civil, administrative and regulatory, corporate and cartel legal matters. We advise also on municipality related business matters such as water management and heat supply. The following fields of expertise are our core business:
Our business fields:
We provide public utility companies and municipalities with legal advice in context with the preparation, conclusion and execution of concession agreements (with the particular focus on inter alia consequential charges, concession fees, termination, change of control). We are surely happy to provide our clients with an individual draft for a concession agreement.
Takeover of Energy Grids
From 2002 onwards we have been constantly involved in projects regarding the purchase and takeover of energy grids. We conduct negotiations with previous owners of the concession about the purchase and takeover of energy grids and supervise and conduct the respective purchase and takeover negotiations until the conclusion of a takeover agreement. If the new owner has to purchase the energy grid from the previous owner only on basis of an inadequate price we support negotiations in order to recover the grid purchase price afterwards and pursue such claim if necessary also in judicial proceedings. The purchase and takeover of energy grids is regularly closely linked to grid tariff regulation aspects (as for instance questions on the grid revenue evaluation and transfer of the grids` revenue caps). We deal with these matters on basis of our in-depth knowledge of grid tariff regulation.
The EU 3rd legislative package on the further integration of the European Energy Market and its implementation into German law have set up new requirements for the Unbundling of undertakings being active in a regulated business (natural gas storage and energy grid operation) as well as in other energy business such as power generation or energy sales. In order to comply with the regulatory requirements every energy utility needs to examine to which extent it is affected by the unbundling requirements. In this context it is particularly important to search for compliant solutions which leave well established and proven organizational and functional structures unaffected. We offer our advice in this context in particular with respect to the implementation of a praxis proven and efficient model for transparent and clear organizational structures which meet the organizational and informatory unbundling requirements including the setting up and up to date adaptation of the necessary documentation (e. g. “Gleichbehandlungsprogramm”).
Grid Tariff Regulation
We have long-time expertise in the grid tariff regulation. Since the start of the tariff regulation on basis of the decrees on grid tariffs (“Stromnetzentgeltverordnung”/ “Gasnetzentgeltverordnung”) in 2005 we represented numerous municipal grid operators in regulatory and judicial proceedings against decisions of the regulatory authorities on grid tariffs. Based on these experiences we advise our clients on legal matters related to the grid incentive regulation (“Anreizregulierungsverordnung”) (including among others regulation account (“Regulierungskonto”), investment budget, set off of obtained surplus revenues (“Mehrerlössaldierung”)).
Closed Distribution Grids and Customer Facilities
The novation of the Energy Industry Act (EnWG) of August 4, 2011 came up with a „new regulatory world“ for operators of distribution grids dedicated to special purposes – until that time commonly known under the name “area grids” (“Objektnetze”). The former Section 110 EnWG has now an entirely new content. The exemption from the grid regulation granted for area grids (“Objektnetze”) by that provision has been substituted by a provision on “closed distribution grids”. Grids which are according to the legal definition “closed distribution grids” are now to a far greater extent subject to the general grid regulation.
Basically these grids are now only exempted from the grid incentive regulation, from the requirement to apply officially authorized grid tariffs, from certain notification and information obligations and from the obligation to purchase the grid`s energy consumption by public tenders.
However, by means of the EnWG novation another category of energy facilities has been officially acknowledged. The definition list in Section 3 EnWG has been supplemented by nos. 24a and 24b to define the terms “Kundenanlage” and “Kundenanlage zur betrieblichen Eigenversorgung”. These definitions might facilitate practicable solutions for operators of small and geographically restricted energy distribution facilities. If an energy distribution facility belongs to the category of a “Kundenanlage” or “Kundenanlage zur betrieblichen Eigenversorgung” it is not subject to the grid regulation. We recommend owners and operators of small energy distribution grids to verify whether their grid can be categorized as close distribution grid pursuant to Section 110 EnWG or as a customer facility (“Kundenanlage”). This is in particular advisable if an energy distribution grid has been categorized as „Objektnetz“ under the former EnWG 2005. We gladly assist you in this categorization including the potentially recommendable communication with regulatory authorities and third parties. We support you in the implementation of practicable and reasonable solutions for small distribution grids.
We can avail ourselves of long-time experience in the preparation and drafting of energy purchase and supply as well as energy transport contracts on the domestic market and in an international context. We advise you on the drafting of individual or model contracts including General Terms & Conditions for the supply of energy to end customers (household and industrial customers) including “Grundversorgungskunden” (customers according to StromGVV/GasGVV). Moreover we offer advice on the setting up of contractual terms for the provision of metering services and for decentralized heat & power supply. With respect to gas transport and supply contracts it is in particular Dr. Wegerich who has gained experience in the setting up of a contractual solution for an efficient third party gas market access.
Energy Cartel Law
An essential topic in the energy cartel law is the support of eneryg supply prices against market abuse allegations put up by cartel authorities and consumer associations (Sections 19, 29 Gesetz gegen Wettbewerbsbeschränkungen/German Cartel Law). In the gas market the market abuse topic arises in context with the requirements of the Federal Cartel Authority (Bundeskartellamt) regarding the validity of long-term gas supply and storage contracts. In recent years we observed an increasing role of the cartel law in projects for the purchase and takeover of energy grids after the expiry of concession agreements. Beyond that the provisions on merger control play a frequent role in co-operation projects between energy utilities. We advise our clients in these topics regularly.
Energy Infrastructure Projects
We provide legal advice to our clients on the preparation and execution of energy infrastructure projects such as power plants, grid enhancements and storage facilities. This includes real estate purchase agreements, land lease agreements and servitudes. This includes also the setting up of special purpose vehicles and adequate project target companies. Beyond that we support the conclusion of grid access and grid connection contracts and of energy supply contracts. We are in particular engaged in the development of generation projects on basis of renewable resources.
Renewable Energies and Combined Heat and Power Generation
On 01.01.2012 a new EEG (Renewable Energies Act) came into force. The new EEG changed the up to then existing legal framework remarkably. Central features of the EEG were until recently the 20-year guaranteed feed-in tariff and the cost-shifting scheme to allocate the expenditures for the granting of the guaranteed EEG feed-in tariff between the market participants. Now the EEG 2012 is characterized by its clear intention for a market integration of renewable energies. This opens new opportunities for plant owners and operators which can leave the system of guaranteed feed-in remunerations and try to increase their returns by participating in the energy market. Beyond that the EEG 2012 came up with a remarkable number of new provisions. Some of them clarify an already established practice while others adapt the EEG legal framework to the challenges of the “Energiewende” (the shift from conventional sources to renewable sources). The requirements for a better grid integration of the renewable energy generation were strengthened in particular for solar power plants; provisions on the degression of the feed-in tariff were adapted. Also topics such as grid extension, grid connection, own consumption, the privileges for renewable energy suppliers and the hardship clause for the energy intense industry are subject to new rules. We advise our clients on these and other EEG topics regularly.
Another pile of the „Energiewende“ is the KWKG (Law on combined heat and power generation). A new amendment of the KWKG is currently under way. We support your plans for the implementation of a decentralized energy supply system on basis of combined heat and power generation, in particular with respect to the feed-in of the produced power, the remuneration, the KWK-Bonus, the electricity sale to third parties and energy tax matters.
Energy Commodity Trading, Purchase and Sale of Energy
We support our clients in the implementation of their energy purchase strategy and portfolio management as well as in the preparation and conclusion of energy sale and trading agreements. We render legal advice in particular in the energy commodity trading and deal with the preparation and conclusion of standard commodity trading agreements such as the EFET General Agreements for the trading in electricity and natural gas including appendices (CO2 and hub related appendices) and accompanying documents such as Cross Product Master Agreement and collaterals (PCG, LoA). We advise you also in the preparation and conclusion of the documentation for financial commodity trading in particular the negotiation of the ISDA Agreement and the Rahmenvertrag für Finanztermingeschäfte. Commodity trading can become subject to the financial market regulation such as the German Banking Act (Kreditwesengesetz) and relevant EU legislation such as the REMIT (Regulation 1227/2011 (EU) of October 25, 2011 on Energy Market Integrity and Transparency). We advise you on a compliant market behavior against the background of the new energy wholesale market regulatory framework. Corresponding with the OTC trading we support clients also in the taking up of trading business on multilateral trading facilities or on the energy exchange EEX.
In the gas sector we advise in particular public utility companies (Stadtwerke) in the purchase of natural gas. Considering the possibilities for the purchase of natural gas on the VHPs and an increasing liquidity of the gas market we advise our clients to take advantage of the emerging chances for the portfolio based purchase of their natural gas amounts. Correspondingly the natural gas sale has changed in the course of the market liberalization too. The sale of natural gas to end customers in areas outside the traditional sales area is an opportunity which we can take up together.
Another core area of legal advice with respect to the sale of energy is the implementation of valid and enforceable price adjustment clauses in sales contracts with end customers (Sections 307, 315 German Civil Code (BGB)).
The liberalisation of the German gas market experienced a remarkable progress in the past supported by a further evolution of the legal bases (inter alia the novated Decree on Gas Grid Access (“Gasnetzzugangsverordnung”) and resolutions issued by the Federal Grid Agency such as GABi Gas, GELi Gas). The number of market areas has been reduced to two and transport capacities are easier accessible for traders and gas suppliers. Smaller utilities and independent market participants can access the gas market easier and avail themselves of possibilities to increase their sales to end customers. At present the market focuses on the search for methods to store electricity in the gas grid infrastructure transformed into hydrogen or in the form of synthetic gas (“power to gas”). In this context we advise operators of biogas facilities as well as grid and storage operators to use emerging market opportunities.
We render legal advice related to water supply. This includes in particular the negotiation and implementation of concession agreements. We avail ourselves of the experience in energy grid takeover projects to supervise and conduct water grid takeovers. We support you as well in the implementation of valid and enforceable water supply contracts and remuneration adjustments. This is particularly important in the light of the resolution the Federal Court of Justice (BGH) issued on 2nd February 2010 on a market abusive behaviour of a municipal water supplier.
The efficient and innovative entrepeneurship has become the common and day to day requirement for all utilities with the objective to make the best of the emerging opportunities of the liberalised energy market. We advise in particular municipalities and municipality owned undertakings on the setting up of co-operations with strategic partners and other municipality owned undertakings, inter alia on co-operations for the operation of energy grids, sales co-operations and energy related services such as metering or decentralised energy supply projects.
Heat Supply and District Heating
We advise you on the preparation and implementation of district heating supply contracts thereby taking into account the cartel law restrictions on the duration of such contracts and the regulation on the remuneration. Beyond that we advise you on the implementation of district heating supply concepts as well as on combined heat and power generation (CHP concepts) for residential areas. The current intention for an establishment of a decentralized and diversified power generation portfolio provides new potential for decentralized power generation projects. We advise you on the implementation of CHP concepts also on basis of contracting solutions for housing and commercial areas in consideration of incentives provided in the Act on Combined Heat and Power Generation (Kraft-Wärme-Kopplungs-Gesetz), in the Renewable Energies Act (Erneuerbare Energien Gesetz) and in the Electricity and Energy Tax Law (Strom- und Energiesteuergesetz).
Energy Consumption Tax
The energy tax law came up with news too. The Decrees on the Implementation of the Electricity Tax Law and of the Energy Tax Law (Strom- und Energiesteuerdurchführungsverordnungen) have been novated in recent times.
It may be mentioned inter alia that the term „plant“ has been adjusted to specify the exemption from the electricity tax in Section 9 no. 3 Electricity Tax Law (Stromsteuergesetz). One consequence of the Law accompanying the public budget of December 9, 2010 (Haushaltsbegleitgesetzes) were restrictions on the tax relief granted to energy contracting concepts. Section 9b StromStG was amended by means of the Haushaltsbegleitgesetz. Tax relief is provided since then for the electricity consumption in order to generate other energy such as light, heat, cold or mechanical energy to undertakings belonging to the production sector only if the energy is used by an undertaking belonging to the production sector too. Further remarkable changes for the taxation of energy consumption will be brought up by the novated EU Energy Tax Directive. We support you on basis of the actual developments in your individual design of your generation and consumption portfolio.