RAE’s public service compensation plan offers gains and losses

Revisions planned by RAE, the Regulatory Authority for Energy, for the country’s Public Service Compensation (YKO) system, expected to soon be delivered to the energy ministry for endorsement, feature three electricity consumption categories instead of the previous four.

The new system’s categories will lead to YKO electricity bill surcharges of 0.008 euros for consumption between 0 and 1,600 kWh per four-month billing period, 0.045 euros for consumption between 1,600 and 2,400 kWh and 0.080 euros for consumption over 2,400 kWh.

Based on the current system, YKO surcharges included on electricity bills – imposed primarily to subsidize high-cost electricity production on Greece’s non-interconnected islands and also support the Social Residential Tariff (KOT) program – cost consumers 0.00699 euros for consumption between 0 and 1,600 kWh per four-month billing period,  0.01570 euros for consumption between 1,601 and 2,000 kWh, 0.03987 euros for consumption between 2,001 and 3,000 kWh, and 0.04488 euros for consumption over 3,000 kWh.

These revisions will not prompt any YKO surcharge changes for consumption up to 2,000 kWh, according to RAE’s calculations, while the public service compensation surcharge for consumption between 2,000 and 4,000 kWh is expected to lead to an YKO reduction of around 40 to 50 euros per four-month billing period. On the contrary, major YKO hikes are expected for consumption levels in excess of 4,500 kWh.

The RAE revision plan includes a retroactive YKO return of 360 million euros to the main power utility PPC for the utility’s coverage of public service compensation costs in the past. This amount is well under the 735 million euros demanded by the utility.

If adopted by the government, RAE’s public service compensation revisions will be tabled in parliament for ratification, no sooner than September. The country’s lenders will also need to enorse the plan as it impacts the country’s fiscal policy.