RAE must act on RES account surcharge, industry upper limit

RAE, the Regulatory Authority for Energy, whose seven-member board will be left without a majority vote as of this Wednesday until members whose terms are set to expire are replaced, will need to decide on the ETMEAR rate for the first half of 2016 and whether to apply an upper limit for the industrial sector’s contribution at tomorrow’s meeting. The ETMEAR rate is imposed on electricity bills to support the renewable energy source (RES) sector.

As has been reported, the authority’s seven-member board is already down to five members following the term expiries of two members on November 20. The terms of two more board members will end Wednesday, which will leave RAE with three board members and unable to implement decisions until new members are recruited. This process is expected to take no less than a couple of months.

RAE, the Regulatory Authority for Energy, decides every six months on the ETMEAR rate needed to keep the RES special account balanced.

If the ETMEAR rate is left unchanged, the renewable energy sources (RES) special account will register a deficit of 15 million euros at the end of this year and 50 million euros by the end of 2016, according to a forecast by LAGIE, the Electricity Market Operator. Both national law and the country’s bailout agreement require a balanced RES account, meaning that the ETMEAR rate would need to be increased.

However, according to energypress sources, the energy ministry intends to continue injecting at least a proportion of revenues collected from CO2 emission right auctions into for the RES special account. Until now, the entire CO2 rights amount raised has been utilized for the RES special account. This will end on January 1 and it has yet to be decided how the amount will be utilized. An EU directive, now incorporated into national law, requires that at least 50 percent of CO2 emission right amounts raised need to be channeled into environmentally related activity. Subsequently, RAE can avoid an ETMEAR rate hike for the next six-month period.

At tomorrow’s board meeting, RAE officials will also need to decide whether to adopt an ETMEAR upper limit for the energy-intensive industrial sector, as requested by an EU directive. A 0.5 percent rate of the added value of respective industrial enterprises is requested by the directive, which, if applied, will reduce the current ETMEAR amounts paid by industrial enterprises.

The sector expects the upper limit will be applied and anticipates the potential savings, along with those to be offered by the “disruption management” plan – to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator –  as well as the new industrial electricity tariffs now being negotiated, will all add up to offset the end of main power utility PPC’s 20 percent electricity discount offered to energy-intensive industrial firms, as was demanded by the country’s lenders.