Industrialists to take 400% gas distribution fee hike case to EC

Greek industrial sector respresentatives are set to take action against a steep 400 percent hike to natural gas distribution fees included in the country’s latest bailout terms as a measure aiming to liberalize the country’s gas market.

According to energypress sources, industrial representatives intend to take their case to the European Commission’s Directorate-General for Competition and contend that the substantial increase, to four euros per MWh from 80 cents per MWh, represents a form of illegal state aid for the country’s three EPA gas supply companies operating in the wider Athens area Thessaloniki, and Thessalia, in the mid-northeast. The price hike, industrials argue, has resulted from a baseless decision without the backing of a study and proposal by RAE, the Regulatory Authority for Energy.

The distribution fee for natural gas is being increased as part of an arrangement to compensate the three EPA gas supply companies, whose exclusive supply rights in their respective regions for 30-year periods, until 2030, will be prematurely ended to help generate competition.

Representatives of energy-intensive industrial enterprises fear the price hike will be relayed throughout the production chain, while certain officials noted that, amid the current adverse conditions, the measure could even lead to closures.

Following serious objections raised last year by industrial sector officials, including SEV, the Hellenic Association of Industrialists, a preceding plan for the gas distribution fee hike had limited the increase to 1.2 euros per MWh from 80 cents. However, that plan never made it to Parliament for ratification as a result of January’s snap elections.

According to estimates, the distribution fee hike will lead to an overall increase of eight percent in the price of natural gas.

Although the increase will apply immediately for the industrial sector, it will not be passed on to household consumers until January 1, 2018, when they are expected to have acquired the right to choose from various gas suppliers.

The hike will also apply for selected major-scale industries, which, until now, have benefited from lower rates, meaning that at least ten industrial companies will need to reassess their budgets.