Drinking Water in Germany: A Case Study of High Quality Drinking Water - Global Drinking Water Management and Conservation - page 268

Germany complies strictly with this structure of water prices. Moreover, Germany
also maintains transparency in pricing and the corresponding disclosure of infor-
mation to the consumer as proposed in the EU announcement (2007, July) (Althoff
2007 ). Consumers are informed about the price level and structure through of

cial
announcements, local and regional press, mail circulars, water invoices, and so on
(Althoff 2007 ).
The fixing of prices and charges is subject to strict statutory regulation and the

pricing is controlled by several governmental levels (Althoff 2007 ). Municipal
utilities of water supply and wastewater disposal are controlled at the municipal
level by the town or local council and within the associations by the respective
bodies and by the municipal supervisory authority (Althoff 2007 ). The municipal
supervisory authority is responsible for implementing local tax laws. Moreover,
pricing is controlled by representatives of the current board of supply and disposal
utilities, who are democratically elected. Furthermore, both public and private water
supply utilities are regulated by the regional associations, and the utilities invoice
their services directly by price to the consumers (Kappel and Schmidt 2007 , as cited
in Althoff 2007 ).
In Germany, pricing is based on

five general principles, which were published in
a 1982 water supply report by the federal government, and were also included in the
local tax laws of the federal L

ä

nder (Althoff 2007 ). These principles can be sum-
marized as follows (Althoff 2007 ):

a. Cost recovery principle. All costs associated with water supply or wastewater
disposal are to be covered by the price or charge. The cost recovery principle
makes the long-term security of the water supply and wastewater disposal
possible since all investment costs for construction and maintenance are
included in prices and charges.
b. Breakdown of charges by consumer groups, according to the costs attributable
to speci

c consumer groups. For example, although an industrial customer may
use the same amount of water as thousands of households, the distribution costs
that the utilities incur are very different.
c. Considerations of cost structure for the determination of the base price and the
quantity price. The average costs for water supply consist of xed costs

(70 30 percent) (see Fig. 12.7 ). Fixed costs

include the costs for maintenance of facilities, which are incurred independently
of the system

80 percent) and variable costs (20

- -

s usage rate, while variable costs are determined by the quantity of
water produced, including costs of wear and tear of equipment for water
treatment, electricity costs for pumping, water abstraction charges, and so on. In
roughly 95 percent of German water supply utilities, price can be divided into a

'

fixed annual base price and a quantity-dependent price (euros per cubic meter).
In fact the fixed annual base price only makes up 10 percent of the total price,

and therefore the structure of the water prices is dominated by variable costs.