A correction to a flawed formula used to calculate the public service compensation (YKO), promised recently by Prime Minister Alexis Tsipras during a visit to the energy ministry, will lead to a new deficit worth tens of millions of euros in the surcharge amount paid by consumers through electricity bills, primarily to subsidize high-cost electricity production on Greece’s non-interconnected islands.
RAE, the Regulatory Authority for Energy, is working on establishing a formula that will avoid imposing maximum YKO rates on entire electricity amounts consumed but, instead, limit this top-rate charge to consumption amounts exceeding an upper limit.
This additional deficit expected to be produced by the new YKO formula will come as an addition to an outstanding YKO amount owed to the main power utility PPC. RAE officials are still working on the amount that needs to be recovered by PPC. The authority is processing related data provided by market operators.
Though PPC is seeking an YKO amount of 735 million euros for 2012 to 2015, the figure is expected to end up being between 400 and 500 million euros. RAE’s final amount will be split evenly over a five-year period, adding about 80 to 100 million euros to the annual YKO account, assuming the lower estimate of between 400 and 500 million euros holds true.
To avoid YKO surcharge increases for consumers, RAE has proposed the transfer of taxes stemming from fuel tax imposed on fuel used by PPC for its high-cost power units on the non-interconnected islands, to the YKO account. These fuel tax revenues are currently added to the state budget.
RAE is striving for a full solution by the end of June.