Numerous energy-intensive companies having production facilities in Germany benefit from energy regulatory opportunities to reduce their electricity costs. The economic benefits of using these opportunities can be significant and quickly amount to several million euros a year. In the context of a number of recent transactions and restructurings relating to energy-intensive companies, we have analysed how the planned transaction/restructuring would affect existing energy regulatory benefits. In some cases, the identified risks and the resulting commercial risks showed up to be real showstoppers. We take this as an opportunity to point out below some typical risks in this context:
1. Limitation of the renewable energy levy by BAFA-decision
Companies which i.a. reach a certain minimum electricity consumption and a certain ratio of electricity costs to the gross value added (Bruttowertschöpfung) may apply to the German Federal Office for Economic Affairs and Export Control (BAFA) for a limitation of the renewable energy levy (so-called "EEG levy" - EEG-Umlage) with effect for one calendar year. If a company benefitting from such a limitation is transformed in the meaning of the German Renewable Energy Act (which includes both measures within the meaning of the German Transformation Act and the transfer of assets by way of an asset deal), the BAFA only transfers the limitation decision where the economic and organizational unit of the original beneficiary remains largely identical. Accordingly, there is a risk that an existing limitation decision will no longer have any effect after the point in time of the transformation. In addition, the preservation of the economic and organizational unit is also a precondition for the company to refer to historical data of the original company in order to proof the limitation requirements for future limitation decisions. If the economic and organizational unit does not continue to exist, the "new" company may consider setting up a short fiscal year (in which, however, the necessary prerequisites must then be fulfilled). In this respect, the risk of a temporary "limitation gap" may result in considerable additional costs.
2. Self-supply models
The German Renewable Energy Act regulates a number of privileges for so-called self-supply models under which companies generate electricity for their own consumption by themselves. In certain constellations, only a reduced EEG levy is due for respective self-supplies. Self-supply models benefitting from certain grandfathering rules can even be completely exempt from the obligation to pay the EEG levy. Unfortunately, restructurings, transformations and/or transactions may result in electricity consumption falling out of the privileged self-supply situation. Furthermore, the transfer of self-supply models benefitting from grandfathering rules to a legal successor is only possible within very narrow statutory limits.
3. Individual network fees
Electricity consumers can benefit from so-called individual network fees. Where certain preconditions are fulfilled (e.g. an electricity consumption of at least 10 GWh at a consistent electricity off-take), network operators have to offer to the relevant network user an individual network fee that may be up to 90 percent lower compared to the regular network fees. In the context of a planned transformation/restructuring/ transaction, the prerequisites for individual network fees could potentially get lost.
Prior to any transformation/restructuring/transaction in relation to an energy-intensive company, it should therefore carefully be analysed at an early stage whether existing relief opportunities may be endangered by the planned measure. On the other hand, it may also well be possible to create relevant preconditions for energy regulatory relief opportunities e.g. by way of restructurings.