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According to research by, consumers pay for replacement care Report Mainz often significantly more than in basic supplies – even though prices on the energy markets have fallen sharply. Experts are calling for changes.
Lukas Welnowski does a price check for his tenants at least once a year. He checks which suppliers give him the cheapest gas and electricity tariffs. The native of northern Germany owns an apartment building with gas central heating in Bad Sachsa in the Harz Mountains, in which several tenants live.
Last winter, the previous gas provider stopped supplying. “My plan at the time was to first go to basic services as normal and then take my time to find a better offer for the tenants in the first quarter,” says Welnowski.
Replacement supply instead of primary care
But this plan didn’t work: instead of being included in the basic supply, the local gas provider classified him as the replacement supply, which was more expensive at the time. Six months later, in the summer of 2023, this also happened with electricity.
Instead of almost 41 cents per kilowatt hour (kWh) in the basic supply, his tenants should now pay almost 82 cents per kWh in the replacement supply. “I found it very strange how it was calculated,” says Welnowski. “To this day I still can’t understand the 82 cents.”
Change in law enabled Price differences
The replacement provision that Welnowski’s tenants received is a special case of basic provision. Customers end up in this if, for example, a change of provider had previously failed or if the previous supplier stops supplying, for example in the event of insolvency. The replacement supply is limited to a maximum of three months.
For a long time, replacement supply was not an issue for consumers in Germany because the prices had to be identical to the basic supply. But that changed in the summer of 2022: the legislature decided to reform the Energy Industry Act. Since then, the prices for basic and replacement supplies have been allowed to differ.
Classification into often more expensive ones Replacement supply
And some energy suppliers are apparently taking advantage of this, observed Julia Schröder, energy law expert at the Lower Saxony Consumer Center. “After this change in the law, customers were wrongly classified as receiving alternative care,” she says. “Of course, this also means higher prices and higher costs for end consumers.”
Back then, in mid-2022, the price differences were understandable. For the replacement supply, companies usually buy energy on the market at short notice – while for the basic supply they often conclude longer-term contracts with their suppliers. After Russia’s attack on Ukraine, energy prices climbed to record levels, and gas and electricity were suddenly twice or three times as expensive as before.
Falling prices on the energy markets
Since then, the energy markets have calmed down significantly again. Example of natural gas: While the price for the EU Natural Gas variety was more than 200 euros per mmBtu in August 2022 (unit equivalent to around 26 cubic meters of gas), it fell to below 30 euros in January 2023. The EU gas price is currently around 27 euros per mmBtu. Compared to the record high in 2022, this is a decline of more than 80 percent.
“But there are still suppliers who charge high prices for replacement supplies,” says consumer advocate Schröder. “The gap between the suppliers is very large. And it’s actually a total mismatch. You’re really at the mercy of it.”
Evaluation shows great Price differences
Colleagues from Schröder recently found out which suppliers still charge higher prices for replacement than for basic care ARD-Politics magazine Report Mainz evaluated. The results of the Rhineland-Palatinate Consumer Center suggest that many basic suppliers have not yet passed on the lower energy prices to their customers in the alternative supply.
According to the evaluation, 32 percent of all basic suppliers in Germany currently charge higher prices for replacement than for basic supplies, both for gas and electricity. The reference date for the survey was January 15, 2024. The consequences can be extremely expensive: for a sample household of three to four people, consumer advocates have calculated a price difference between replacement and basic supplies of several thousand euros per year from several providers.
Monopoly Commission sees structural problem
The problems with the expensive replacement supply have now brought the Monopolies Commission, the body that advises the federal government on competition issues, to the fore. Its chairman Jürgen Kühling demands in an interview Report Mainz a reform of basic services in Germany.
The problem is that there is only ever one basic provider per supply area. This is always the one who already has the most customers in an area.
Call for reform of the primary care
“There are a lot of customers who are unwilling to change and, to put it cautiously, you can treat them in a particularly price-insensitive manner. To put it more bluntly: you can more easily exploit them,” says Kühling. “The current model ultimately leads to strong market positions being cemented and supported. Actually, exactly the opposite of what we want to achieve with competition.”
The chairman of the Monopolies Commission is therefore proposing a tender model for Germany. The largest provider in a region should not automatically be the basic provider, but rather the cheapest. “We want new providers to come into the market with better prices and then make customers happier.”