Supplier surcharge to be reduced by 35% for rest of year

The energy ministry has reached a decision to reduce the RES-supporting supplier surcharge by 35 percent for the rest of 2018, energypress sources have informed.

This reduction is greater than a drop of between 20 to 25 percent that had been anticipated, primarily as a result of the steady RES special account surplus and the reduced number of months the revision will concern as a result of the delay in implementing the measure.

A legislative revision to bring the reduction into effect may coincide with Greek parliament’s ratification, expected soon, of a draft bill for the main power utility PPC’s bailout-required sale of lignite units.

The extent of the supplier surcharge reduction is based on a number of factors, including the RES special account’s surplus for 2018, as projected by LAGIE, the Electricity Market Operator; the amount of the RES-supporting ETMEAR surcharge that needs to be recovered for previous years; an ETMEAR reduction decided on by RAE, the Regulatory Authority for Energy, at the end of 2017; as well as the need for a RES-sector safety cushion of around 50 to 60 million euros.

The government had committed to a supplier surcharge reduction as part of the bailout’s third-review agreement with the lenders. According to this  agreement, the reduction should have been implemented by the end of March.

The country’s lenders made clear that the ETMEAR reduction decided by RAE represents a breach of bailout terms and needs to be corrected by the authority when it makes its next revision for the second half of 2018.

The energy ministry opposed RAE’s move to reduce the ETMEAR surcharge as it knew the lenders would not embrace the initiave.

Greek officials need to decide on the supplier surcharge for 2019 by the end of this year. The government has promised it will abolish the surcharge and replace it with an alternative mechanism.