A leading Greek energy market authority has expressed strong reservations about the financial repercussions of a new pricing model imposed last July on electricity suppliers, concluding the new system will ultimately result in market regression, while also questioning the new system’s legal standing.
These reservations and concerns were expressed by Miltos Aslanoglou, general manager of ESPEN, the Greek Energy Suppliers Association, at the 2nd Energy Law Forum.
Under new market rules, electricity suppliers in Greece are required to announce each forthcoming month’s electricity prices by the 20th of the preceding month.
Measures decided on by authorities for implementation should be thoroughly designed to be effective under various conditions, not just specific circumstances, the ESPEN official stressed.
Had the pricing mechanism been introduced sooner, such as last April, when electricity prices were surging, the country’s electricity suppliers would most probably have been threatened by bankruptcy or even gone out of business, Aslanoglou contended.
Windfall earnings of suppliers, he noted, have created a strange combination where suppliers are spending funds from the previous month to service their portfolios for the next month at a time when market prices have fallen below projected levels.
Such a combination of events can only be circumstantial, the ESPEN official noted, pointing out windfall profits should be limited but based on the financial statements of companies, not pricing regulations.