Public Service Compensation revisions creating new deficit

Recent legislative revisions to Public Service Compensation (YKO) categories and charges will reduce revenues needed to fully balance this account, used to cover high-cost electricity generation on non-interconnected islands and also subsidize power supply to low-income households.

Under the new system, higher YKO surcharge rates applying to higher consumption level categories are not imposed on entire electricity amounts consumed, as was the case under the previous formula, but to consumption amounts exceeding category upper limits.

This change is expected to deprive the YKO account of tens of millions of euros, annually.

The Cyclades are being interconnected to the mainland electricity grid this year, a development that promises to lessen the demands of the YKO account and subdue any developing deficit. Even so, the YKO account deficit will not be fully covered and transformed into a surplus figure until other Greek island interconnections are completed, especially that of Crete, the country’s largest and most populous island.

The YKO account benefits to be offered by the Cyclades interconnection are believed to be worth 100 million euros, annually, according to a 2014 estimate.