Vattenfall Successful with Raue in Dispute About Concession for Power Grid in Berlin

Raue successfully represented Stromnetz Berlin GmbH, a company of the Swedish Vattenfall Group, before the Berlin Regional Court. The State of Berlin may not award the electricity concession in the State of Berlin to the state-owned bidder Berlin Energie and may not nationalise Germany’s largest municipal electricity distribution grid.

Stromnetz Berlin operates the power distribution grid in the capital. The basis is the right to operate the grid, which the State of Berlin grants as the owner of the public roads (electricity concession). In 2011, the State of Berlin initiated a procedure to re-award the electricity concession. In March 2019, the Senate Department for Finance announced that it would award the electricity concession to the Land’s own bidder Berlin Energie. Stromnetz Berlin has objected to the planned self-award and applied to the Berlin Regional Court in July 2019 for an injunction to be issued. The Berlin Regional Court has ruled in favour of Stromnetz Berlin.

In the opinion of the regional court the procedure violated the neutrality requirement in several respects. The double position of State Secretary Dr. Sudhof, who at the beginning of the award procedure was responsible both for the bidder and for the procurement office, was inadmissible. There was also a lack of sufficient personnel and organizational separation in the Senate of Berlin. The Senator for Finance, who was responsible for the award procedure, was involved in deliberations on his own application throughout the entire award procedure. Conversely, the senators responsible for the tender of the biddeer took part in consultations on the procurement procedure. In some cases, the procurement procedure and the state’s own tender were also discussed in a single Senate session.

In the opinion of the Berlin Regional Court, the State of Berlin also failed to demonstrate that the bidder Berlin Energie had the necessary technical and personnel capacity to reliably operate the Berlin electricity distribution network. “Newcomers” would also have to submit a well-founded concept for the operation of the acquired grid, which leaves no questions unanswered and is realizable immediately. The idea of a “holistic take-over of operations” from the current grid operator was not a conclusive and plausible operational concept, neither with regard to the technical equipment nor the personnel. In particular, the reference to the takeover claim under section 46(2) sentence 2 EnWG and the hope of a voluntary change of employees from Stromnetz Berlin are not sufficient in the opinion of the Regional Court. Also the reference to a network of supporters is too vague.

The Berlin Regional Court also found that there had been a violation of the ban on discrimination because the bidder Berlin Energie was only a “placeholder” in the procurement procedure and the State of Berlin had kept open the possibility of transforming the bidder into a legal entity under private or public law. Finally, the Court found that the requirement of transparency had been violated due to insufficient access to the file. In any case, the State of Berlin should have disclosed the bid made by the bidder.

Against this background, the court refrained from dealing with further complaints by Stromnetz Berlin.

The judgement of the regional court Berlin is not yet final. The Land Berlin may file an appeal with the Court of Appeal.

(11 November 2019)