The country’s three regional EPA natural gas supply companies covering the wider Athens area, Thessaly and Thessaloniki have submitted their tariff proposals for 2017 to RAE, the Regulatory Authority for Energy, and are now awaiting its response, expected around mid-November, which will shape their future moves, including whether legal action will be taken against against the Greek State for damages.
These tariff proposals concern smaller-scale industrial consumers as the EPA companies will decide for themselves on the tariff levels to be offered to major-scale industrial consumers.
The RAE decision will influence whether the EPA company foreign shareholders, Shell and Eni, will take legal action against the Greek State seeking compensation for the premature end to their regional monopolies, carried out as part of Greece’s gas market reforms. Shell and Eni had signed contracts promising them exclusive regional supply rights over an extended period.
DEPA, Greece’s Public Gas Corporation, holds majority 51 percent stakes in all three EPA gas supply companies. Shell holds a 49% stake in EPA Attica, covering the wider Athens region, while the Italian multinational Eni holds 49% stakes in the Thessaly and Thessaloniki ventures.
Shell and Eni have been considering taking legal action since 2014, when the plan to disrupt their monopolies was first tabled.
All non-household customers, regardless of natural gas consumption levels, will have the right to freely choose suppliers as of January 1, 2017. The retail natural gas market will be fully liberalized a year later, on January 1, 2018, when households will also be entitled to choose their respective supplier.
The country’s three major independent electricity suppliers, Protergia, Elpedison and Heron, are expected to also enter the natural gas retail market in 2018, once it is fully liberalized.
Besides the tariff level issue, the EPA supply companies are also concerned about the WACC (Weighted Average Cost of Capital) figure of 9.23 percent already set by RAE. EPA company officials have remarked that this figure neither reflects the level of risk entailed in the Greek market nor the limited penetration of natural gas.
Also, sector officials have pointed out that the 9.23 percent figure is insufficient as major investments of the past have yet to be amortized, while it fails to offer incentive for further expansion of the network into new areas.