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Dazed and confused by kilowatt choices in das Kapital

As Europe's electricity market opens up, many Germans are stumped by

The counterattack arrived in the form of a glossy black brochure that fluttered into my mailbox a couple of weeks ago.

Berlin's electric company, BEWAG, for decades the city's sole provider of power, was going on an unusual charm offensive to keep customers from deserting in a fully liberalized market.

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"From Nov. 1, we have electricity for the whole family," the brochure declared in white letters placed over the blue neon outline of a (rather incongruous) teddy bear.

BerlinKlassik is the name for the standard service, which now costs 20 percent less than before. There is also an "eco-pure" option, generated only from renewable energy sources - and some 30 percent more expensive. MultiConnect, the cheapest choice, is a mix of sources.

As if this weren't confusing enough - even for an American familiar with US long distance wars - more than a dozen companies have sprouted up in Berlin, hawking their kilowatt hours to private households in a boisterous market that just a few months ago didn't exist.

A European Union directive originally laid out the gradual opening of the electricity markets across Europe, beginning with large commercial customers and only later including private homes. The old utility monopolies in Germany were ill-prepared for the early appearance of hundreds of new providers this year.

Americans may want to take note: 21 states have passed some form of electric industry restructuring and more are considering such legislation.

During the summer, a large utility company in southwest Germany founded a subsidiary, the intriguingly named Yello. In a massive, saffron-tinted ad campaign, the company offered consumers a real deal - a basic monthly fee of roughly $10 and 10 cents for every kilowatt hour. This is a third less than the old rate in Berlin but about 20 percent higher than the US average.

"It shook up the entire market," says Jrg Haas, an energy expert for the Heinrich Bll Foundation in Berlin. "Yello entered with dumping prices, and now the others are following suit along a wide front." The company claims to have signed up more than100,000 customers already.

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Consumer advocates warn that cheap rates can be deceiving, since they are often connected with basic fees, long-term contracts, and the fine-print difference between "gross" and "net" electricity prices. Environmentalists complain that power sold as ecologically friendly is false advertising. For example, the pricier "aquapower" sold in the western German state Bavaria, critics say, is little more than a subsidy of the cheaper power rates for electricity generated by coal and nuclear plants.

"The utilities take existing renewable energy and sell it for more, but no new renewable-energy plants are being built," says Felix Matthes of the Berlin office of the ko Institute for Applied Ecology. "Real 'green energy' is only new green energy. In the end, the people who buy green power are only helping other customers buy cheaper electricity."

The drop in prices also throws a monkey wrench into the plans of the environmentally oriented Greens party, the junior member of the ruling coalition government, to introduce a highly controversial "ecological tax" on electricity. The proposal goes to parliament's upper chamber for approval today.

"It's a problem for the environmental goals of the Greens," says Mr. Haas of the Bll Foundation, which is close to the party. "Investments for certain energy conservation measures are no longer worth it with the liberalization. And there is less incentive to conserve."

Because it is no longer profitable in the deregulated market, Germany's largest "ecological" power plant, a hydroelectric plant on the Rhine, cannot go ahead with a planned expansion. And Germany's highly efficient, ecologically friendly cogeneration plants, which produce electricity as a byproduct of heating, are suddenly facing stiff competition from cheaper, often dirtier sources.

What then, is the consumer concerned about reaching a balance between low cost and environmental protection to do?

I threw out the ads, ignored the hype, and stayed with my previous service. That would be "BerlinKlassik, the quality power."

(c) Copyright 1999. The Christian Science Publishing Society

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