LAGIE, the Electricity Market Operator, has submitted its market regulations proposal, in anticipation of the upcoming NOME auctions, to RAE, the Regulatory Authority for Energy, according to energypress sources.

Regarded as being one of the most technically challenging requirements of the series of demands included in the bailout agreement, the proposal will now be forwarded by RAE for public consultation.

Two crucial issues, among many, need to be confronted by the regulations. One of these, highlighted by the international creditors, requires blocking energy-intensive industrial units from indirectly participating in the auctions by acquiring electricity supply permits in order to essentially supply themselves.

The creditors insist that the upcoming NOME auctions must not be utilized as an industrial cost-reducing tool but, instead, as a means to offer suppliers access to competitively priced fuels, both lignite and hydropower, which will drive down prices and further liberalize the retail electricity market.

To date, the main power utility PPC has had exclusive access to low-cost lignite and hydropower sources. The utility’s market dominance is beginning to erode as competition sets in.

LAGIE’s regulations propose setting an upper limit to electricity amounts suppliers will be permitted to sell to energy-intensive industries using over 13 GWh per year. It is estimated that this limit will represent about 35 percent of each supplier’s total electricity stock.

The new market regulations will also need to avert mass exports of low-priced electricity to be purchased by suppliers at the NOME auctions. International creditors insist that no limitations are required here but local authorities who prepared the new regulations believe that an upper limit must be applied.

The issue will be debated in the public consultation process before a final decision is reached.