BBH succeeds for network operators before the Higher Regional Court: determination of the rate of return on equity unlawful

The decision has been made: the Higher Regional Court (OLG) of Düsseldorf announced today in 14 model case proceedings that the rate of return on equity for the 4th regulatory period was determined unlawfully by the Federal Network Agency (BNetzA) and now has to be redetermined.

In October 2021, the BNetzA redetermined the rate of return on equity to be applied in the regulation of charges (5.07% for new installations and 3.51% for existing ones), thus lowering the rate of return that can be achieved by electricity and gas network operators for investments in energy supply networks by more than 25% compared to the previous period’s level. A total of 927 complaints had been received against the drastic lowering of the rate of return on equity. One BBH team, supported by three renowned financial experts, processed about 475 complaints relating to gas and electricity. With today’s decision, the Cartel Panel confirmed the network operators’ case: the determination of the rate of return on equity was unlawful.

BBH partner and lawyer Stefan Missling highlights the importance of the decision: “This is a significant achievement for the industry, particularly in light of restrictive case law of the Federal Court of Justice (BGH) in connection with methodical decisions of regulatory authorities. The BNetzA is now required to redetermine the rate of return on equity. This is a remarkable result given the importance of the grid infrastructure for the energy transition.”

The Higher Regional Court of Düsseldorf granted leave to appeal on points of law to the German Federal Court of Justice. In other words, it remains to be seen whether the BNetzA will appeal to the Federal Court of Justice. “The right thing to do would be for the BNetzA to take the court's judgement as an opportunity to comply with its own decision at the time and adjust the rate of return based on the turnaround in rates that has occurred,” says BBH partner and public auditor Thomas Straßer.

The BBH group is a leading provider of advisory services for energy and infrastructure companies and their customers. Energy and supply companies, particularly public utilities, municipalities and local authorities, industrial companies and international groups are among its core clients. BBH advises these and many other companies and organisations in all legal and tax matters and also assists them with business and strategic advice.


Prof. Dr. Ines Zenke
Rechtsanwältin/Lawyer, Partner
Phone +49 (0)30 611 28 40-179

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