Sparks Fly Between Government, Utilities

German energy giant RWE is accusing the government of using a debate about runaway electricity prices to make political capital ahead of the general elections next month, according to the business daily Handelsblatt on Tuesday. Environment minister Jürgen Trittin, for his part, rejected in an interview with the same newspaper the power utilities' arguments for raising their electricity prices. Their argument that the price rises were largely due to trading in emission rights that was introduced at the beginning of the year was unconvincing, Trittin said. Germany this year introduced a system limiting the emission of so-called greenhouse gases into the atmosphere. Companies are allocated a certain volume of emission rights which are tradable. Thus, companies that emit more gas than they are allowed must buy the right to do so from other companies that have not used up all of their rights. "Emissions trading cannot be the reason for the strong rise in electricity prices in recent weeks and months," Trittin said. RWE recently claimed that it had to spend around 350 million euros ($427 million) annually as a result of the "tight distribution" of emission rights certificates. In a letter to the minister, RWE chief Harry Roels rejected Trittin's argument. "Such simplistic finger-pointing may appear to be favourable for the current election campaign but does not stand up to the current economic and market conditions," Handelsblatt quoted Roels as saying.