Gov’t planning more extensive energy-crisis support measures

Consumers are feeling increasingly disgruntled by exorbitant energy costs, turning into a political problem for the government, which is now aiming to intervene with measures that could offer protection and reasonable energy prices for as many households as possible.

The government has yet to decide on the details of its updated energy-crisis support plan for consumers but intends to implement measures absorbing nearly 80 percent of tariff increases resulting from a wholesale price adjustment clause included in electricity bills.

Government officials are still considering a number of approaches that could offer consumers energy-cost relief. These include a wholesale electricity market price cap, an increase in the current level of subsidies offered in the retail electricity market, or a combination of measures.

The breadth of the consumer protection measures, their financing, swiftness of implementation, obstacles and tools to be used to overcome these obstacles are key factors of the national plan.

Under the country’s current electricity subsidies program, limiting subsidies to monthly electricity consumption of up to 300 KWh, average-income households consuming big energy amounts and low-income households using electricity for heating have been left feeling exposed.

Over 1.5 million households around the country are believed to be unable to cope with current energy costs.

The cost of energy-crisis support measures offered so far is estimated at more than five billion euros, over a year. CO2 emission revenues, excess RES earnings injected into the Energy Transition Fund, the public service compensation account surplus, and the Recovery and Resilience Facility (RRF) have all been used to finance the support.

An additional one billion euros could be provided through the budget, along with any revenues that may result from a 90 percent tax on windfall profits in electricity production.

The government, it is believed, is preparing to offer a new, widespread solution budgeted at five billion euros over a one-year period. Its cost could be divided over the 2022 and 2023 budgets.

Government decisions are anticipated next week. Expectations for a European solution at the next summit of EU leaders, scheduled for May 30 and 31, are low.