Veag protests against legislation

The major German utility Veag has filed a complaint in the Federal Constitutional Court in Karlsruhe against the government`s electricity supply legislation. Veag believes that the law will create a financial burden for the German energy sector and will cause market distortions.

The legislation`s provision for the subsidy of some forms of energy at the expense of others has caused Veag to argue that the law is an infringement of fair and equal competition. Wind power plants will be subsidized by up to DM0.13/kWh ($0.07/kWh). The Berlin-based utility claims that the east German energy sector will have to support a financial burden of $154m per year as a result.

Veag has also stated that lignite based generation will be put at a disadvantage. The utility has already invested $9.2m in the modernization and construction of lignite fired capacity. It also believes that the aim of bringing tariffs in east Germany down to the level of those in the west will be affected.