Communities of need receive too little money for electricity

Heidelberg – Electricity prices have only known the upward trend for years. This especially affects the needy in Germany. The state subsidies are far from sufficient to pay the above-average electricity prices. In addition, recipients of social benefits less often have the opportunity to change the electricity provider.

 

Picture: Hand puts 50 Euro bill in electricity meter 

In April 2011, according to the Federal Employment Agency, around 6.5 million people living in a total of 3.5 million households in need of assistance received unemployment benefits II or social benefits. The regular requirement for single people currently amounts to 364 euros per month. Of this 364 euros, legislators are planning to install 30.42 euros (8.36 percent) for electricity, cooking gas and housing maintenance.

Electricity costs exceed the standard rate by 45 percent

That the standard rate of 30.42 euros is set too low, shows a look at the Verivox consumer price index electricity. A single household with an annual electricity consumption of 2000 kWh will pay an average of 26.43 cents per kilowatt-hour in May 2011. This corresponds to monthly costs of 44.05 euros. Thus, the pure electricity costs already exceed the standard rate by 45 percent – the expenses for cooking gas and housing maintenance come even more.

“The calculation of the regulatory requirement is a complicated statistical and political process that we can not fully assess,” said Peter Reese, Head of Energy at Verivox. “However, for the household energy sector, we can clearly say that it was too optimistic.”

Higher costs and less choice

Anyone who receives state support is required by law to consciously handle the money and act economically. But the needy can only partially participate in the competition on the electricity market.

Most supraregional electricity providers check the creditworthiness of new customers in order to avoid possible payment defaults. This risk assessment takes into account financial difficulties in the past, but also softer factors such as age or place of residence. In practice, this means that many consumers who receive government support often can not switch to a cheaper electricity supplier.

The result is that the low-income households remain bound to the local electricity supplier. There, they are usually supplied to the conditions of the universal service. However, the local basic service tariff is by far the most expensive way to obtain electricity – so a household pays about 5 percent more than the German average.