German antitrust body probes Berlin gas grid concession

Wed Jul 2, 2014 11:02am EDT

* Federal cartel office intervenes in Berlin row

* Fight is about public versus private-sector operations

* Licence up for renewal

FRANKFURT, July 2 (Reuters) - Germany's federal cartel office on Wednesday said it had begun investigations into the planned award of an operating licence for the city of Berlin's 7,000 km gas network to public sector group Berlin Energie from 2015.

The probe follows a complaint about the planned award from a private sector gas company GASAG and its distribution network subsidiary NBB.

The plans to award the licence to a public sector group are another example of a "re-communalisation" wave in the German utility industry in which assets such as power and gas grids are returned to public hands.

This marks a reversal of the trend towards liberalisation that has driven energy policy over the past two decades.

Supporters of the trend argue this is better for consumer prices, local jobs and promoting green energy policies, but cartel authorities stress owners must face the competitive market.

GASAG, the current licence operator for the Berlin gas network, is owned by subsidiaries of GDF Suez, Vattenfall and E.ON.

"We will try and establish whether the decision and selection of the transfer of the concession for the Berlin gas grid breach any regulations seeking to prevent abuse under cartel law," Andreas Mundt, president of the Bonn-based authority, said in a statement.

The federal cartel office had been acting as a consultant in the selection procedure since 2012 and had pointed out an especially critical "change-of-control" clause that would protect the interests of future municipal owners, it said.

It pointed out that the current plan was decided solely by the city of Berlin, where there is friction over the issue within a coalition government made up of Conservatives and Social Democrats, and not subject to a vote by the cartel authority.

Cartel law must ensure that the most suitable operator is picked for energy network operations, not one deemed more advantageous for respective political causes.

(Reporting by Vera Eckert. Editing by Jane Merriman)