EPA Attica to offer €50m in subsidies for gas installations

EPA Attica, the gas distribution company covering the wider Athens area, plans to offer a subsidy program worth five million euros per year, or 50 million euros over the next ten years, for private gas system installations.

According to energypress sources, the subsidy amount works out to 1,500 euros per apartment block or 700 euros per house.

EPA Attica has asked RAE, the Regulatory Authority for Energy, to incorporate part of the subsidy’s cost into tariffs, but it still remains unclear how this could be arranged.

The issue is connected to RAE’s recent endorsement of distribution fees concerning natural gas networks of the wider Athens area, Thessaloniki, Thessaly and the remainder of Greece.

Market officials expect RAE to endorse trading prices for 2017 before company strategies are determined. Traders are expected to submit their proposals late this month and a response from the authority is expected within November.

Shell, which holds a 49 percent stake in EPA Attica, and ENI, also a 49 percent shareholder of the EPA supply companies covering Thessaloniki and Thessaly, will be waiting for RAE’s decisions before they decide whether to seek compensation from the Greek State for the premature end to their respective regional monopolies. DEPA, the Public Gas Corporation, controlled by the Greek State with a 65 percent stake, holds majority 51 percent stakes in all three EPA gas supply companies.

As part of the country’s gas market reforms in progress, all non-household gas consumers will be free to choose suppliers as of January 1, 2017. Household will be abe to do so a year later.

A WACC (Weighted Average Cost of Capital) figure of 9.23 percent determined by RAE has prompted a negative reaction from the EPA gas supply companies. EPA Attica officials have noted that the figure neither reflects the Greek market’s level of risk nor the limited penetration of gas in the Greek market. Shell and ENI will need to decide on whether such a WACC rate is satisfactory for new investments concerning the network’s expansion to new areas.