NOME-type auctions plan set for public consultation

RAE, the Regulatory Authority for Energy, is set to forward for public consultation the procedures it has prepared for NOME-type auctions, to facilitate energy-cost reductions for industry, within the next few days, possibly even today.

Through its revisions of the plan, the authority has sought to satisfy the demands of interested parties as greatly as possible. Sources said the NOME-type auction plan would prompt an equal measure of satisfaction and dissatisfaction.

Price-level details will not be disclosed at this stage. However, as has been previously reported by EnergyPress, pundits tend to agree that starting-price levels will stand at levels proposed during last February’s general shareholders meeting at PPC, the Public Power Corporation. Prices are expected to be determined through a process to include the accounting cost declared by PPC for lignite-based production, which is valued at about 60 euro per MWh. An amount representing PPC’s “yield incentive” will then be deducted from this figure. Other factors to be taken into account in determining the auction price levels will include the conclusions of a cost-inspection study conducted by Ernst & Young, as well as a court verdict on a case involving Aluminium SA and PPC.

The plan’s final draft, following the public consultation process, will be presented in September once the European Commission has offered its approval on the starting prices of auctions.

Once the draft has been legislated, the first round of auctions is expected to take place towards the end of the year, as has been scheduled.

Industry had reacted strongly to the first draft presented by RAE. The sector’s demands had included the ability by industrialists to return to the system a proportion of contracted energy not consumed by industries. Industrialists had also called for electricity prices to be determined administratively and not through auctions. Industry has also been pressing for the determination of respective industrial consumer rights based on individual consumption patterns, which would benefit units operating at night. Industrialists are also seeking avoidance of a special consumption tax imposed on natural gas.