Press release November 24, 2023
Keeping our word: District heating price to fall!
As announced in the summer, Iqony Fernwärme will reduce the district heating price in the region by around a quarter as of January 1, 2024
Essen/Gelsenkirchen/Bottrop. What had already been indicated in the summer has now been confirmed: Because the price of natural gas in particular has fallen noticeably, Iqony Fernwärme is adjusting its district heating price again as of January 1, 2024 – but this time with a positive message. As the kilowatt hour rate is to fall by 4.37 cents (net) from the current level, the district heating price for customers, consisting of the basic rate, kilowatt hour rate and meter charge, will fall by around 24 percent overall.
The background to the price adjustment is the pricing system that generally applies to district heating supply in Germany. The price is generally subject to an adjustment clause, which regulates how the district heating price changes in response to cost and market factors. The legislature has clearly regulated price adjustments in the Ordinance on General Terms and Conditions for the Supply of District Heating (AVBFernwärmeV, Section 24 para. 4).
Consequently, prices are adjusted at regular intervals and increase or – as in the current case with regard to the energy price – decrease, depending on the development of the indices for the individual price components. The energy price (net) will fall by 4.37 cents per kilowatt hour (kWh) compared to July 1, 2023. If the basic rate, kilowatt hour rate and meter charge are taken together, this results in a reduction in net prices for district heating of more than 24% or almost a quarter.
Price indices from independent sources
Iqony Fernwärme’s price adjustment clause is also based on this principle. The formula is derived, among other things, from the price developments for the generation and provision of the company’s district heating. All indices and price quotations used by Iqony Fernwärme – the price determining factors – come either from the Federal Statistical Office or from the European Energy Exchange. Both of these are independent organizations governed by public law.
Even though individual price components and their indices have continued to rise since the summer, the significant fall in the gas price according to the European Gas Index (EGIX) has led to a noticeable reduction in the kilowatt hour rate; the basic rate and meter charge remain unchanged.
Iqony keeps its word
Michael Straus, Commercial Director of Iqony Fernwärme, comments as follows: “With the price reduction now coming at the turn of the year, we are keeping our word: As soon as the development of the price indices makes this possible, we reduce our prices accordingly – exactly as the pricing system for district heating stipulates. In this respect, we are also pleased that market developments, particularly in the first half of the year, have confirmed our forecasts.”
This shows that the development of consumer prices in the district heating sector is not a one-way street, but that the pricing system works and does exactly what it is supposed to do: to map price developments for the generation and supply of district heating as well as market developments on an index basis and thus ensure transparent and verifiable price developments – regardless of the direction they take.
