Council of State

Court hears case against power producers’ windfall tax formula

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The Council of State, Greece’s Supreme Administrative Court, heard, last week, an appeal filed by energy company Heron and the Mytilineos metals and energy group’s Protergia and Corinth Power companies to challenge a tax formula applied for windfall profits of electricity producers.

The energy ministry has adopted a windfall tax formula proposed last year by RAAEY, the Regulatory Authority for Waste, Energy. It establishes windfall earnings to be taxed by comparing profits in 2022 with those of 2021.

The plaintiffs, in their case, contend that the use of 2021 as a base year for the comparisons is incorrect as it represents the inaugural year of the target model, which brought about anticipated inaccuracies as market players sought to adjust to this new mechanism.

Authorities ought to have gone back further in time for a fairer comparison with 2022 results before determining windfall profits to be taxed, the plaintiffs have argued in their case.

The Council of State will, most likely, uphold the windfall tax formula being applied as it has raised significant amounts for the Energy Transition Fund, helping millions of households and enterprises cope with the energy crisis through subsidized energy.

A decision by the Council of State is expected imminently.

 

Low-income household, non-payer measures in the making

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The government plans to soon announce new electricity market measures addressing two extremes, low-income households requiring support and strategic non-payers fleeing from their obligations.

Prime Minister Kyriakos Mitsotakis, who discussed measures concerning both issues during a recent meeting at the energy ministry, is expected to announce new measures at September’s Thessaloniki International Fair.

Low-income households are expected to be offered further protection against high energy costs, while strategic non-payers exploiting market rule loopholes to switch suppliers despite owing amounts to previous suppliers will face tougher rules.

The support measures for low-income households will include energy-cost relief for large families, while the government’s toughened stance against strategic non-payers will include rewards for punctual payers.

The country’s electricity suppliers have been burdened with an estimated 500 million euros in bad debt over the past year, alone, as a result of the actions of strategic non-payers.

Their ability to avoid payments was greatly assisted by a decision issued by the Council of State, Greece’s supreme administrative court, in 2016. The court annulled a market rule requiring consumers to settle outstanding amounts owed to suppliers before switching.

The pursuits of strategic non-payers were further assisted approximately a year ago when the government, in its package of energy crisis measures, included a revision permitting consumers to switch suppliers without incurring penalties for premature withdrawals from contracts.

Athens court orders gas distribution operators to return €8m to industries

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The Athens Administrative Court of Appeals has given industrial enterprises the green light to recover just over 8 million euros in compensation fees for 2015 and 2016, validated by RAAEY, the Regulatory Authority for Energy, from the country’s three gas distribution network operators, EDA Attiki, EDA THESS and DEDA, after they had appealed the authority’s decision.

RAAEY has approved specific amounts compensating industrial enterprises for universal charges imposed on them by the three gas distribution network operators between August 14, 2015 to December 1, 2016.

However, the gas distribution network operators have failed to make the specified compensation payments, resorting, instead, to legal action disputing RAAEY’s decision.

Three of metal group Viohalco’s companies, Elvalhalkor, Sidenor and Sovel, are entitled to compensation amounts.

According to the RAAEY decision, gas distributor EDA Attiki, covering the wider Athens area, must return a total of 1.44 million euros to industrial consumers, EDA THESS, covering Thessaloniki and Thessaly, owes 3.26 million euros to industrial players, and DEDA, responsible for gas distribution to all other parts of Greece, must return 4.13 million euros to industrial customers.

The 8.83 million-euro sum is expected to be paid by the three gas distribution network operators over 36, interest-free installments, from November, 2021 to October, 2024.

Should the operators appeal the Athens appeals court verdict, the case will need to be taken to the Council of State, Greece’s Supreme Administrative Court.

New Supreme Court hearing delay for Crete offshore licenses

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A court hearing concerning a legal case filed by environmental groups challenging an environmental impact assessment for prospective hydrocarbon exploration at two offshore licenses, west and southwest of Crete, by a consortium consisting of Total, ExxonMobil and Hellenic Petroleum (ELPE), has been suspended for a fourth time since 2019 by the Council of State, Greece’s Supreme Administrative Court, which has set a new date, October 5, 2022, according to sources.

The latest delay comes as a setback for the three-member consortium, which faces a first-stage exploration deadline preceding the new trial date.

Total, ExxonMobil and ELPE have planned seismic surveys at the two licenses, believed to offer natural gas production potential, but the trio cannot proceed with any exploration activity unless it overcomes this legal challenge.

Authorities tasked with assisting the government in legal action taken by environmental groups are seeking to move forward the new trial date, for a swifter conclusion.

The latest court delay highlights fears previously raised by upstream officials believing the country’s official policy on hydrocarbon deposit utilization remains ambiguous.

It remains to be seen how Total, ExxonMobil and ELPE will react to the hearing’s latest delay.

Supreme Court avoids ruling on new-deal RES tariff reduction

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The Council of State, Greece’s Supreme Administrative Court, has decided, following a three-year procedure, it does not have jurisdiction to rule on a case filed by RES investors in reaction to a significant reduction of their contracted tariffs for solar energy production at existing units, prompted by a so-called new deal in March, 2014, energypress sources have informed.

The court’s decision has not yet been officially announced.

By taking a step back on the tariff-reduction matter, the court will also avoid ruling on the constitutionality of the new deal and its compatibility with European law.

Though the court decision does not vindicate the RES investors, it leaves open the possibility of compensation claims against the State, an option that will be exercised by at least some of the investors who offered comments to energypress.

 

RES licensing simplification to face environmental resistance

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The head official of a special committee assembled by the government to simplify RES licensing procedures is seeking bold steps leading to major progress but the body’s task could be troubled by firm resistance from environmental groups.

The energy and environment ministry’s secretary-general Alexandra Sdoukou, who heads the special committee, is expected to push for decisive action and real results at the group’s second meeting, planned for next Monday.

Sdoukou wants more than just a reduction of supporting documents and digitization of existing procedures, her objective being to truly revolutionize licensing procedures for swift results and an increase in green energy investments.

Simpler RES licensing procedures are crucially important if ambitious targets included in the new National Energy and Climate Plan are to be achieved. A large number of RES projects will need to be developed over the next decade if NECP targets are to be met.

However, the path is not expected to be obstacle-free. Energy ministry officials are very much aware of the constant threat of amendments being legally challenged at the Council of State, Greece’s supreme administrative court, over environmental concerns.

Signs of resistance have already begun emerging within the ministry’s environmental division as a result of conflicting views on matters such as avifauna, biodiversity and NATURA-area protection.

The country’s new spatial plan for the renewable energy sector, currently being prepared, will play an instrumental role in generating sufficient RES growth for the achievement of NECP targets. Two leading figures at the ministry’s environmental section hold key positions for the spatial plan’s shaping.

 

Ministerial intervention enables restart at PPC’s Megalopoli IV

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Power utility PPC’s Megalopoli IV coal generator in the Peloponnese has been given permission to recommence production following a revision of the unit’s environmental terms and license extension.

The energy ministry intervened to overcome a decision by the Council of State, Greece’s supreme administrative court, preventing a revision of the facility’s environmental terms, which delayed the unit’s return to production.

The power station, whose renewed license has a ten-year duration, could return to action as soon as today.

New Democracy MP Kostas Vlassis recently announced the Megalopoli power station would soon be operating again after meeting with PPC chief executive Giorgos Stassis.

PPC had submitted an application requesting a revision of the environmental terms and a license extension in January.

Crete grid link tender deadline extended by a few days

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The deadline of a tender for the engineering, procurement and installation of cables and stations concerning the Crete-Athens electricity grid interconnection, needed to prevent an energy shortage on the island, Greece’s largest, has been re-extended to August 5 from July 29, after the initial expiry date had been set for July 22.

Power grid operator IPTO, which has established the Ariadne Interconnector subsidiary for the project’s development, needed, according to the tender’s terms, to inform participants of the latest deadline no later than three days before the existing deadline. IPTO issued an announcement on the deadline extension yesterday.

A second tender for the engineering, procurement and installation of two transformer stations and a substation concerning the project has been extended to August 30.

Earlier this week, the Council of State, Greece’s Supreme Administrative Court, rejected a case filed by Euroasia Interconnector against the tenders, paving the way for IPTO to push ahead with the project, to be completed over two stages. The first will link Crete with the Peloponnese while the second will connect Crete with the Athens area.

Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status project to link the Greek, Cypriot and Israeli grids, has fought for development control of the Crete-Athens segment.

According to some sources, the Greek government may exhaust all possibilities for the project’s funding support through the EU’s PCI catalog, offering favorable terms. The interconnection’s development as a national project is another option.

A government decision on the course it will opt to take is expected over the next few days. The priority, at this stage, is to push ahead for the project’s swift completion.

 

Union action no threat to PPC, ELPE sales, officials assure

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The energy ministry and TAIPED, the state privatization fund, have both reassured respective action taken by union groups representing the main power utility PPC and ELPE (Hellenic Petroleum) will not disrupt ongoing privatization efforts for either.

All necessary steps have been made to ensure smooth progress of a bailout-required sale of PPC lignite units and mines representing 40 percent of the power utility’s lignite capacity, the energy ministry has  declared.

As for the ELPE sale, TAIPED – representing the Greek State, offering 20.5 of its 35.5 percent stake along with Paneuropean’s 30.47 percent of 45.47 percent held – has opted not to comment on the mobilization efforts of PSEEP, the ELPE workers union group, suggesting it does not fear a disruption of the 50.1 percent sale.

Genop, the PPC union, has filed a case to the Council of State, Greece’s Supreme Administrative Court, seeking a rejection of environmental terms concerning the Meliti power facility included in PPC’s sale package. This move’s ultimate aim is to delay the overall sale.

PSEEP has taken triple action, filing its ELPE case to the local Capital Market Commission, which has prompted a public offering procedure dispute, London bourse authorities, and European Parliament’s Committee on Petitions (PETI), believing a violation of European law exists.

 

PPC’s additional public service amount case still in contention

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A main power utility PPC case filed to the Council of State, Greece’s Supreme Administrative Court, with the aim of doubling a 360 million-euro Public Service Compensation (YKO) retroactive return decided on by RAE, the Regulatory Authority for Energy, for older YKO amounts from 2011 onwards, is still in contention and has now been passed on to a Court of Appeal for examination.

The Council of State considers that a legal error was committed by RAE, possibly prompting a miscalculated YKO amount.

The Court of Appeal will now need to judge whether the RAE decision was legal, and, in addition, whether a related formula for YKO amounts and returns was correctly applied.

PPC is seeking an additional amount of around 375 million euros to the initial 360 million-euro YKO amount decided by RAE, which would take the retroactive tally to 735 million euros.

 

 

PPC insisting on additional €375m public service amount

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Despite not having made any official announcements, the main power utility PPC has not abandoned its effort to collect additional public service compensation (YKO) payments worth approximately 375 million euros for a period following 2011.

On the contrary, the power utility has taken its case to the Council of State, Greece’s Supreme Administrative Court, in an effort to have a RAE (Regulatory Authority for Energy) decision cancelled. This decision by the authority set the amount owed to PPC at 360 million euros. PPC officials believe the total YKO amount should be worth 735 million euros.

Sources said the case could boil into a hotly contested legal dispute.

An initial request by PPC calling for RAE to revise its decision was rejected by the authority before the power utility turned to the Council of State.

A preliminary session held at the Supreme Court earlier this week focused on procedural matters, energypress sources informed. It is believed the court questioned whether it holds jurisdiction to hear this specific case.

PPC disputes a formula used by RAE to determine the older YKO amounts and has also questioned the overall time period applied as well as whether the authority correctly left out 2012 from its calculations.

The state-controlled power utility received the 360 million-euro sum determined by RAE as a lump sum in December through a government social support program. Though this payment offered financial relief to the utility, it is still contesting an additional 375 million euros, which would bring the total amount for public service compensation from 2011 onwards to 735 million euros.

 

 

PPC NOME starting price high court hearing postponed until March

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A legal case filed by the main power utility PPC to the Council of State, Greece’s Supreme Administrative Court, challenging the starting price set for NOME auctions, has been postponed until March 27, 2018 after being scheduled to be heard on December 5.

NOME auctions were introduced in Greece a little over a year ago to offer independent suppliers access to the utility’s low-cost lignite and hydropower sources.

State-controlled PPC has not only persisted with its legal action, despite the government’s condemnation of the utility board for its decision to take the case to the Supreme Court, but also added further details to the case’s dossier.