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GERMAN FEDERAL CARTEL OFFICE ASKED TO INVESTIGATE ALLEGED COMPETITION LAW VIOLATIONS IN THE ENERGY SECTOR
FOR IMMEDIATE RELEASE: Wednesday, November 18,1998
FRANKFURT, GERMANY -- 18 NOVEMBER 1998 -- Enron Energie GmbH, Frankfurt, an Enron subsidiary, has asked the German Federal Cartel Office (Bundeskartellamt) to investigate possible violations of the Restraints of Competition Act (Gesetz gegen WettbewerbsbeschrŠnkungen - GWB) and the Energy Industry Act (Energiewirtschaftgesetzs - EnWG) in connection with a transmission access request made by Enron.
Enron's request was made to the Bundeskartellamt following the denial by the regional supplier ELEKTROMARK, based in Hagen, of transmission access required to allow Enron to supply electricity under a contract concluded with Stadtwerke LŸdenscheid. ELEKTROMARK, which is Ludenscheid's current supplier as well as the regional grid operator, has refused Enron transmission access. ELEKTROMARK claimed that an alleged network constraint would hinder the transmission of the Enron power
supplies to Ludenscheid. An independent study conducted by KEMA Consulting, commissioned by Enron, indicates that while such constraints may exist they have not previously blocked supply. While delaying their response to the Enron transmission access request, and then ultimately denying that access, ELEKTROMARK has sought to conclude a parallel electricity supply contract with LŸdenscheid.
In its request to the Bundeskartellamt, Enron noted that during discussions with ELEKTROMARK, the regional supplier stated that the alleged network constraints occur during current network operation. ELEKTROMARK further explained that it manages these constraints by adjusting its own generation purchase and transmission schedules to meet customer transmission requirements. In its role as network operator ELEKTROMARK has, however, refused to make the same adjustments for Enron in order to allow Enron to supply LŸdenscheid.
Mark Frevert, CEO of Enron Europe, said "The denial of transmission access is unjustified, and it is unfortunate that intervention by the Bundeskartellamt is required in what should be a liberalised energy market. A non-discriminatory approach to transmission network operation would enable both Enron and ELEKTROMARK to conduct their respective businesses in a way which satisfies the needs of both companies' customers."
"Anti-competitive behaviour, including the denial of transmission access, plus the lack of clear transmissions tariffs and of transmission functions separated from generation and supply, is denying German energy customers the freedom to choose suppliers at competitive prices, as intended by the Energy Industry Act (Energiewirtschaftgesetzs - EnWG). Enron fully supports the principles of the EnWG, but is concerned that some existing suppliers currently apply such principles in a restrictive and anti-competitive manner. As a result, German industry is being competitively disadvantaged by higher energy costs and fewer options for managing their energy needs than companies in other European countries."
Editors Notes
KEMA Consulting forms part of N.V. KEMA, a Dutch engineering and consulting firm for the electricity industry. KEMA Consulting is internationally recognized as one of the leading consulting companies specializing in technical, operational and organizational issues related to the liberalization of the electricity industry. KEMA Consulting has assisted electricity utilities in several countries in developing a Grid Code, including assisting the Deutsche Verbundgsellschaft (DVG), in developing "The Network and System Rules of the German Transmission System Operators".
Enron has been active in Germany since 1993 when it acquired the 125 MW Bitterfeld power station, now jointly operated and managed with MEAG. Today more than 30 employees actively market Enron energy-related products and services to German customers. In July 1998 the company became the first non-national new market participant to be licensed to supply electricity to end consumers in Germany.
Based in Frankfurt, the company also markets wind-turbine technology from its subsidiary Tacke Windtechnik, based in Salzbergen, Neidersachsen.
Enron's European activities were established in 1989 and are based in London. Enron Europe today employs more than 600 people, primarily in offices in Frankfurt, London, Madrid, Moscow, Oslo and Warsaw, and is also present in several other European countries. Enron is the market maker for electricity trades in Norway and is ranked among the leading spot gas and electricity marketers in the UK. Across Europe Enron has developed, part owns and operates power stations in Germany, Italy, Poland, Turkey and the UK, including the world's largest privately-owned CCGT combined heat and power plant, the 1875 MW Teesside power station in the UK.
Enron is one of the world's leading integrated electricity and natural gas companies. The company, which owns approximately $30 billion in energy related assets, produces electricity and natural gas, develops, constructs and operates energy facilities worldwide and delivers physical commodities and risk management and financial services to customers around the world. Enron's Internet address is www.enron.com, and the stock is traded under the ticker symbol, "ENE."
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For additional information please contact:
Sieglinde Schneider (Accent PR )
+49 611 402 022
Joan Wasylik (Enron)
+44 171 316 6689
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