New subsidy model, in October, to reward lower power usage

The government is preparing to replace flat-rate electricity subsidies offered to all consumers, regardless of power usage levels, with a new subsidy model rewarding consumers using less electricity.

According to government sources, a new model for electricity subsidies will be implemented October 1 for households, professionals and businesses.

Under the new system, subsidies will be determined by an algorithm taking into account energy savings.

Officials have yet to decide whether subsidies will only be awarded to consumers who have achieved specific consumption reduction targets, or whether various subsidy levels offered will be inversely related to power usage.

For example, consumption levels of up to 300 KWh in a month could by subsidized by certain amount that would be reduced for consumers exceeding this monthly consumption limit.

The subsidy model changes, to be made quickly, are likely to cause complications for suppliers, who are still coming to grips with the existing subsidy system and are not expected to be informed of the new plan’s finalized details until just before its launch.

Suppliers have already made clear that a subsidy system awarding households and businesses amounts inversely related to consumption levels would be the fairest solution.