Tips for choosing German utility suppliers

Tips for choosing German utility suppliers

by: Bastien Allibert | .
www.settle-in-berlin.com | .
published: April 07, 2017

Among all the issues and worries that come with being stationed in Germany, picking utility suppliers is probably not on the top of your list. However, if you are living off base, this could cost you hundreds of euros or more per year. This important issue deserves more attention, and, in return, you can spend that saved cash on your next weekend trip.

What does the German utility market look like?
Four large companies are in control of most of the German utility market: RWE, EnBW, E.ON and Vattenfall. They manage electricity and gas production with natural gas, coal plants, hydroelectric stations, wind farms and nuclear power plants. They are also in charge of some parts of the energy grid and, ultimately, distribution. Since the 1990s, the big national players have acquired many municipal utility companies, but some have remained active.

As a consumer, your home's utilities are most likely handled by the local "default" supplier, but you are free to switch, which can save you a lot of money. This also means that if you have just moved in, you will always have electricity and gas, even if you have no contract yet.

How can I get the best prices for electricity and gas?
There are a number of platforms that will allow you to compare plans and prices across all suppliers for your area. You can turn to Check24 or Verivox. The process is always the same and fairly similar to signing up for a new cable plan:

•Enter your postal code
•Enter your annual consumption
•Pick your plan
•Enter your personal information (you will need a German bank account for that)
•Receive documents and contract

From there, your new supplier will automatically notify your old one that you have switched. You might receive a final bill from the old one to settle your balance.

What should I consider when picking a new supplier?

Bonuses
This has become a fairly common practice: a promise to receive 100 euros or more for signing up with a new utility supplier. Although it sounds great, this should not influence you too much in your decision. This can sometimes hide a bad deal with higher costs in the long run. The wording is also quite clever, but it's really just a discount on your first bill, not an actual money transfer to you.

Price guarantee
You'd be better off focusing on price guarantees that set the price for your electricity or gas consumption to a certain level for a certain amount of time. Market prices often fluctuate for these companies, and they tend to pass on the extra costs to their customers. As energy prices tend to increase over time, it's a good idea to have a contract that guarantees you a set price for two or three years.

Fine print
Pay attention to cancellation terms. German companies tend to allow "monthly terminations," but it often means that while a termination notice can be given in any given month, the contract might run for another year after that. This important because an equivalent of the Civil Relief Act that lets you out of contracts due to military orders doesn't exist in Germany.

Billing cycles
Billing cycles can also impact prices. German utility companies will offer lower prices if installments are yearly or biannually, instead of monthly. Make sure you know which you have selected to avoid surprise bills during the year.

How are utilities calculated?
Billing is based on estimated usage and rates. Adjustments are made when the meters are read, which can result in a surprise — either a credit or a hefty bill. Plan on the latter to avoid financial stress. If it is determined that you have been underpaying, contact your utility company and request them to adjust the usage rate for the following year.

How can I take advantage of the Utilities Tax Avoidance Program (UTAP)?
You can legally avoid taxes on your utilities by joining the UTAP. Not all companies participate in the program, so do your research before signing up for a new contract. Stadtwerke (municipal utilities) are often part of UTAP as they are more aware of local market needs. Your local UTAP office can assist you in finding the right companies in your area.

If UTAP is available at your installation and you receive a Living Quarters Allowance (LQA), you must enroll in the program. Enrollment in the program is voluntary, and recommended, for everyone else.  

When going to the UTAP Office you will need to bring the following with you:

• Copy of orders (or other document showing assignment to Germany)
• Department of Defense identification card
• Copy of lease or home-ownership document
• Any housing documents you may have received that pertain to this dwelling
• Serial Numbers of meters and meter readings (take pictures with your smartphone)
• Your local banking details (Bank Name and IBAN Number - CONUS only banks do not work)
• Government email address
• Unit/place of work information
• Name and phone number of your supervisor
• Payment of $99 in form of cash, check, or credit/debit card
• Any communication received from utility suppliers

Following those few tips will, hopefully, save you some money, so you can enjoy your free time in Europe. 

Source: This article was adapted from a post on the blog Settle in Berlin about internet providers in Germany. Settle in Berlin is a simple blog helping foreigners to navigate German administration since 2011. It was quoted by the Berliner Zeitung and the government-issued magazine Deutschland Aktuell as a go-to resource for foreigners. 

Tags: utilities, Electricity, UTAP, Germany, Tax, Price, gas, Power, Utility, PCS
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