Suppliers united against RAE’s electricity-bill revision proposals

The country’s entire spectrum of electricity suppliers, from power utility PPC, vertically integrated energy groups, to independent suppliers, have all denounced electricity-bill restriction proposals made by RAE, the Regulatory Authority for Energy, which wants to offer consumers greater clarity and price-comparing ability, rejecting the proposed measures as outdated and inconsistent with European standards.

Electricity suppliers across the board contend the proposals, which offer less leeway in the shaping of offers, would stifle competition and ultimately increase tariffs for consumers.

In recent months, suppliers have been forced to activate electricity bill clauses as they have battled to cope with the impact of sharply increased natural gas prices in international markets as well as higher carbon emission right costs, all of which has led to elevated costs for consumers.

Supplier representatives, in comments to energypress, noted that RAE should have already taken other forms of action to protect consumers, pointing out systematic checks for misinformation practices, false advertising and unfair commercial policies.

The authority has proposed a 30 percent limit on clause-related increases and decreases; the termination of fixed costs, noting that, unlike tariffs, directly comparable, fixed costs tend to cause consumer confusion as they can run for one-month or four-month periods; the termination of an early-withdrawal clause, to stimulate greater consumer mobility; as well as electricity supply price inspections every three months, the objective being to counter temporary below-cost offers extended by some suppliers to lure customers.

 

RAE clause revision proposals not embraced by suppliers

A series of electricity bill-clause revisions proposed by RAE, the Regulatory Authority for Energy, seeking greater clarity and price-comparing ability for consumers, have already prompted negative reaction from suppliers, expected to lodge their complaints, in writing, to the authority by Thursday.

In recent months, suppliers have been forced to activate electricity bill clauses as they have battled to cope with the impact of sharply increased natural gas prices in international markets as well as higher carbon emission right costs, all of which has led to elevated costs for consumers.

The authority has proposed a 30 percent limit on clause-related increases and decreases; the termination of fixed costs, noting that, unlike tariffs, directly comparable, fixed costs tend to cause consumer confusion as they can run for one-month or four-month periods; the termination of an early-withdrawal clause, which would stimulate greater consumer mobility; as well as electricity supply price inspections every three months, the objective being to counter temporary below-cost offers extended by some suppliers to lure customers.

In comments to energypress, supplier representatives contended that RAE’s proposed measures would stifle competition and restrict the shaping of offers made to consumers.

RAE is seeking to standardize electricity-bill offers, which would eliminate any leeway available to suppliers for flexibility in their offers, especially when concerning fixed costs, some supplier representatives stressed.

Wholesale ascent prompting hefty retail electricity price hikes

The activation, by electricity suppliers, of wholesale cost-related clauses included in their supply agreements is prompting significant retail increases, seen rising, compared to three months earlier, by 40 percent for the medium-voltage category and at least 33 percent for the low-voltage category.

Medium-voltage tariffs, previously at levels ranging between 64 and 65 euros per MWh, have reached 90 euros per MWh, a 40 percent increase, since the wholesale cost-related clauses were triggered by suppliers earlier this year, and are expected to rise further.

In the low-voltage category, concerning households, tariffs have increased from levels ranging between 70 and 90 euros per MWh, depending on the supplier and agreement, and will need to be raised to 120 euros per MWh for the recovery of increased wholesale costs.

Higher wholesale electricity prices have been attributed to a combination of factors, including higher CO2 emission right and natural gas prices, as well as a sharp rise in demand.

The situation is exacerbated during periods when RES output is subdued, prompting record-level price levels in the wholesale electricity market.

Last week, CO2 emission right prices set a new record of 58.25 euros per ton, up from 32 euros per ton in December, an 82 percent increase.

Natural gas prices have hit a 13-year high, TTF contracts reaching 29 euros per MW/h following levels of between 15 and 17 euros per MW/h in spring, a 93 percent increase. In June last year, gas prices had sunk to record-low levels of as low as 4.9 euros per MWh.

Last week, the average clearing price on the energy exchange ranged from 100.33 to 118.56 euros per MWh, up from 63.16 euros per MWh a month earlier.

In June, the average day-ahead market price on the energy exchange was 83.47 euros per MWh, more than double the level of 40.74 euros per MWh a year earlier.

RAE effort for universal supplier cost-clause policy facing delay

RAE, the Regulatory Authority for Energy, working on a universal cost-clause policy for all electricity suppliers, to offer consumers greater electricity-bill transparency and price-comparing ability, has extended, until the end of June, a deadline it set for suppliers to deliver related market data details concerning all of 2020 and 2021, until the present.

Independent suppliers, who recently triggered wholesale price-related clauses in electricity bills to protect themselves against elevated wholesale prices, were questioned by the authority and then requested, as early as a month ago, to produce related data but have failed to deliver, instead calling for more time.

Power utility PPC was the first supplier to be summoned for questioning over its decision to trigger a CO2 cost-related clause incorporated into its electricity bills.

RAE had initially planned to stage a public consultation procedure for a universal clause policy within July, after examining the data provided by suppliers, but this plan will now be delayed.

Given the fact that overall business activity slows down severely during the August holiday period, RAE’s proposal is now not expected to be forwarded for consultation any sooner than September.

Taking into account supplier objections expected to surface during the procedure, the new cost-clause policy cannot be expected to be implemented before October.

Consumer complaints over sharp electricity cost increases and lack of transparency in electricity billing have risen considerably in recent times.

Wholesale prices up nearly 20% in first 5 months, retail levels impacted

Wholesale electricity market prices rose by nearly 20 percent in the first five months of the year, official market data provided by power grid operator IPTO has shown.

These wholesale price increases directly impact retail price levels for consumers who have opted for floating-tariff supply agreements linked to wholesale price-related clauses.

The overall cost of electricity in the wholesale market rose 19.1 percent between January and May, from 64.111 euros per MWh to 76.373 euros per MWh.

Electricity prices in the day-ahead and intraday markets rose by 14.1 percent between January and May, from 55.612 euros per MWh to 63.499 euros per MWh, the data showed.

Discrepancy cost nearly doubled during this period, rising from 0.836 euros per MWh to 1.643 euros per MWh.

Power utility PPC, which, until now, has incorporated CO2-price clauses into its electricity bills, has announced it will adopt wholesale price-related clauses in August.

RAE working on common clause policy for suppliers

Following up on its intervention against power utility PPC’s recent decision to trigger a CO2 emission price-related clause for medium and low-voltage consumers, RAE, the Regulatory Authority for Energy, has now begun questioning independent suppliers over their adoption of a wholesale price-related clause.

The authority, to concurrently investigate the legality of these initiatives, has asked suppliers to forward related data concerning all of 2020 and 2021, up to the present, by the beginning of next week as part of its effort to establish a common clause policy for all suppliers that can clarify the price-comparing ability of consumers.

RAE aims to announce a new set of rules on electricity bill clauses in September, following public consultation, possibly in July.

Once RAE has examined market data expected from independent suppliers, it intends to hold a series of talks with them as of June 21.

PPC, which, just days ago, was asked by RAE to replace its CO2 price-related clause with one linked to wholesale price levels, is doing so, announcing it will also implement a 30 percent discount as of August 5 to offset, as much as possible, a price rise anticipated as a result of its adoption of the wholesale price clause.

RAE summons suppliers for use of cost-increasing clauses

RAE, the Regulatory Authority for Energy, has summoned electricity suppliers to offer explanations on their decisions to trigger, in recent times, clauses that have significantly increased electricity costs for consumers in the low and medium-voltage categories without any prior notice.

The country’s independent suppliers have activated wholesale price-related activated clauses, protecting them against wholesale cost increases, while power utility PPC, more recently, has taken unprecedented action by triggering a CO2 emission rights cost-related clause incorporated into its agreements with customers.

Consumers across the board have lodged numerous complaints, prompting RAE to take action. The authority will stage meetings with suppliers to examine if irregularities exist or whether consumers have been misled.

This series of meetings is expected to begin next Thursday with PPC, whose administration will need to justify its pricing policy. Meetings with independent players are expected to follow.

RAE will request detailed market data from all suppliers concerning the clauses they have implemented and also examine whether these initiatives are lawful or not.

The authority will aim to clarify what actions suppliers are permitted to take so that consumers may benefit from clearer pricing policies.

PPC triggering carbon cost clause as CO2 right prices soar

Higher wholesale electricity and carbon emission right prices are applying sustained pressure on the electricity market, forcing suppliers to continue activating related clauses incorporated into customer supply terms.

Over the next 12 months, wholesale electricity price levels are forecast to rise to 89 euros per MWh in the low-voltage category and roughly 79-80 euros per MWh in the medium-voltage category.

In response to an ongoing surge in CO2 emission right prices, power utility PPC recently decided to finally activate a CO2-related clause after holding back for months. The move is seen increasing the cost of PPC’s electricity bills to be issued in May by two to three euros, sources told energypress.

CO2 emission right prices reached a new record level of more than 52 euros per MWh yesterday, rising by nearly 3 percent in a day. They have approximately doubled over the past six months and registered a 23 percent increase in the last month, alone.

In February, PPC had announced it would not trigger a CO2-related clause for low-voltage supply, but has now been forced to do so as a result of this persisting rise in price levels.

The more recent rise in CO2 emission right prices has been attributed to several factors, including a gradual rise in consumption levels as the European economy begins to recover, weather conditions, and a new, more ambitious, EU carbon emission reduction target, set last month, of at last 55 percent by 2030.

Consumers hit with tariff hikes of over 20% in low, mid-voltage

Sharply higher wholesale electricity prices registered over the past five weeks or so in the energy exchange’s new target model markets have, to a great extent, been quietly passed on by suppliers to consumer tariffs in the household, business and industrial categories, without any related announcements  from suppliers.

Price hikes by electricity suppliers have applied to approximately 35 percent of total electricity consumption, during this period, while tariff hikes have exceeded 20 percent in the low and mid-voltage categories.

In the low-voltage category, suppliers have activated clauses enabling tariff increases when wholesale price levels exceed certain levels.

Very few independent electricity suppliers, both vertically integrated and not, carry fixed-tariff agreements in their portfolios, exposing most consumers to wholesale electricity price fluctuations.

On the contrary, power utility PPC, representing roughly 65 percent of overall consumption, does not include wholesale price-related clauses in its supply agreements, meaning its tariffs have remained unchanged over the past few weeks.

Instead, PPC includes clauses linked to emission right prices in international markets. These have remained relatively steady in recent times.

Even if wholesale electricity prices happen to deescalate in the next few weeks, a likely prospect, some latency should be expected in any downward tariff adjustments by suppliers.

Numerous consumers have lodged complaints with RAE, the Regulatory Authority for Energy, over the tariff hikes by suppliers. Complaints by suppliers against energy producers setting excessively high prices in target model markets have also been made.

Suppliers resort to legal action against RAE over price clauses

Electricity suppliers may have adjusted price-related clauses included in their electricity bills following a request by RAE, the Regulatory Authority for Energy, seeking greater price-comparing clarity for consumers, but some of these suppliers, who consider the authority’s initiative to be an intrusion into corporate pricing policy matters, have chosen to take legal action against the authority.

RAE had asked for a standardized adjustment from electricity suppliers by June 14, but they responded with loose individual interpretations of the guidelines before many resorted to legal action.

When forwarding its clause-adjustment request to suppliers, RAE also asked the energy ministry to adopt its guidelines for official incorporation into the electricity market’s regulations.

According to sources, the energy ministry does not intend to adopt RAE’s recommendations and, instead, has asked the authority to reconsider its guidelines.

Electricity suppliers include clauses in their supply agreements with consumers that enable price revisions to cover cost increases.

Many consumers have complained about the price-related clauses, noting they are included in fine print and confusing.

 

 

Suppliers seen loosely interpreting RAE clause adjustment request

Electricity suppliers, set to disclose adjustments to price-related clauses included in electricity bills, are expected to offer loose interpretations rather than strictly comply with  related guidelines offered by RAE, the Regulatory Authority for Energy.

Suppliers, who were given a June 14 deadline to make clause adjustments as a means of simplifying electricity-bill cost analysis and offer comparisons for consumers, have been highly critical of the authority’s guidelines, describing them as an intrusion and restriction on pricing policy.

Some suppliers have even threatened to take legal action against RAE, but this is not possible as the authority’s initiative is a proposal not an order.

Even so, suppliers need to present revisions, based on their respective interpretations of the RAE guidelines that will somehow reflect the proposals. Otherwise, consumers who are aware of the authority’s guidelines could turn against suppliers and file official complaints.

Suppliers, through their interpretations, will, without a doubt, seek leeway that could enable their commercial departments to attract customers.

RAE has asked suppliers to adopt standardized price-related clauses.

Suppliers have reassured they will deliver adjustments in accordance with the RAE recommendations but do not believe the overall effort will improve the ability of consumers to compare competing offers.

RAE set to officially announce new cost-clause rules for suppliers

RAE, the Regulatory Authority for Energy, has prepared a list of cost-clause guidelines for electricity suppliers, the objective being to offer consumers greater transparency and improve price-comparing ability.

Electricity suppliers typically include cost-related clauses in electricity bill agreements as cover for various unanticipated cost shifts. However, some of these clauses, usually included in fine print, have tended to confuse or astonish consumers, prompting complaints.

RAE is expected to officially announce its new set of cost-clause guidelines, ten in total, by next Tuesday, energypress sources have informed.

The guidelines have also been forwarded to the energy ministry, which may choose to apply them for an amendment of electricity supply rules. This would make the guidelines legally binding.

Suppliers will have two months to adjust to the new guidelines, otherwise they could face penalties.

According to the RAE guidelines, electricity suppliers must include a fixed-tariff option for household and small business consumers as an alternative to an adjustable rate.

In addition, suppliers will need to set a realistic range of clause-triggering cost levels so that clause usage is limited to unusual, damage-inflicting market conditions for suppliers.

Any clauses included in supply contacts must be clearly presented along with all other terms, not in fine print. Also, clause-related charges and calculations must be clearly shown in every electricity bill.

Furthermore, electricity supplier websites must include clause examples.

Another new term states that penalty clauses for premature consumer withdrawals from supplier contracts should be limited to fixed-tariff agreements. Such a clause should not be included in supply agreements for consumers who have chosen floating tariff rates as these consumers have taken on the risk of any cost changes, according to the new RAE guidelines.

Suppliers given 2 months for cost-clause rule adjustments

Electricity suppliers have been given two months to fully comply with a list of new cost-clause rules just issued by RAE, the Regulatory Authority for Energy.

Suppliers include cost-related clauses in electricity bill agreements as cover for various cost shifts. However, some of these clauses have tended to confuse or  surprise consumers, prompting complaints.

“The authority’s objective is to protect consumers,” a highly-ranked RAE official informed, pointing out that the new regulations will help consumers make clear price comparisons of various supplier offers in straight-forward fashion.

RAE staged a public consultation procedure on the matter over many months before deciding on its new clause rules, ten in total.

Electricity suppliers must include a fixed-tariff option for household and small business consumers as an alternative to an adjustable rate. Also, cost adjustment clauses will be based on one standardized formula.

In addition, suppliers will need to set clause-triggering cost levels realistically so that clause usage is limited to unusual, damage-inflicting market conditions for suppliers.

Any clauses included in supply contacts must be clearly presented along with all other terms, not in fine print. Also, clause-related charges and calculations must be clearly shown in every electricity bill, according to the RAE guidelines.

Furthermore, electricity supplier websites must include clause examples.

Another new rule states that penalty clauses for premature consumer withdrawals from supplier contracts should be limited to fixed-tariff agreements. Such a clause should not be included in supply agreements for consumers who have chosen floating tariff rates as these consumers have taken on the risk of any cost changes, the new RAE rules note.

RAE cost-related clause rules for electricity supplier bills imminent

A RAE (Regulatory Authority for Energy) plan detailing cost-related clauses electricity suppliers will be permitted to include in their electricity bills is expected to be finalized within the next few days, possibly by the end of this week.

The energy authority is expected to deliver clause guidelines following months of public consultation on the matter.

Electricity suppliers will need to adjust to these new guidelines as part of an effort being made by authorities to improve the price-comparing ability of  supplier offers for electricity consumers.

Independent suppliers have warned the new RAE guidelines could once again stifle competition in the country’s retail electricity market by limiting pricing-policy leeway for suppliers and consumer choices.

 

Independent players want clauses for cost factors other than the SMP

Supplier cost clauses should not be limited to the System Marginal Price (SMP) as various other wholesale market factors influencing the overall cost should also be taken into account, independent electricity suppliers have agreed in a related public consultation procedure completed yesterday.

Previously, RAE, the Regulatory Authority for Energy, proposed the implementation of a standardized SMP as the only permissible clause, the objective being to simplify consumer price comparisons of supplier offers.

Though independent suppliers do not want their supply term clauses limited to the SMP, they acknowledge this factor remains relevant under the current system, ending mid-way through 2020 with the arrival of the target model.

Suppliers believe some time will be needed for observations concerning the SMP’s replacement, including day-ahead market prices.

Also, the target model’s new markets will bring about significant supply cost changes that cannot be calculated at present, suppliers noted in the public consultation procedure.

Though PPC has asked that its contribution to the public consultation procedure not be published, the utility’s opposition to the cancellation of a CO2-related clause it applies is already widely known.

PPC chief supports use of CO2 clause, simplification expected

Power utility PPC’s chief executive Giorgos Stassis has defended the company’s need to maintain a CO2 cost clause included in its electricity bills as protection against emission cost increases, at a meeting with RAE (Regulatory Authority for Energy) officials.

The authority is working on revisions aiming to simplify electricity-bill clauses for greater transparency to household and business consumers.

Numerous complaints have been made by customers feeling confused by the current terms. RAE wants to establish terms enabling clearer price comparisons of supplier terms.

PPC’s right to maintain its CO2 clause has been questioned. At the RAE meeting, held yesterday as part of ongoing public consultation, the power utility’s chief contended creditor banks insist on the measure’s maintenance, adding its cancellation would require further electricity tariff hikes.

RAE may decide to continue permitting CO2 clauses once the target model is introduced, according to sources. If so, the current format will be revised to  offer consumers clarity, the authority has already stressed. Decisions are expected in about two weeks.

Imminent RAE decision expected to offer consumers clause clarity

Price-adjustment clauses included in electricity bills by suppliers are expected to be limited to the System Marginal Price (SMP), or the wholesale price, in an upcoming related decision by RAE, the Regulatory Authority for Energy, anticipated by the end of January, possibly within the next few days.

The energy authority, reliable sources informed, is revising clause-related rules following the completion of public consultation on the matter.

A growing number of households and businesses have lodged complaints after seeing their electricity bill costs pushed higher by clauses included by suppliers as protection against narrowing profit margins.

RAE staged a public consultation procedure over many months for feedback from disgruntled consumers. Many complaints were focused on a lack of transparency regarding the activation of clauses by suppliers.

Consumers are hoping the new RAE rules will simplify price comparisons of offers made by electricity suppliers.

Authority wants to end virtually all power bill price clauses

RAE, the Regulatory Authority for Energy, has prepared a plan aiming to abolish all price-related clauses included in electricity bills except for one linked with fluctuations of the System Marginal Price (SMP), or the wholesale electricity price, sources have informed.

The overall objective of this plan, which could be forwarded for public consultation within the next few days, is to offer full transparency to consumers on procedures determining their electricity bill costs.

An existing clause enabling electricity suppliers to revise prices in accordance with CO2 emission cost levels would need to be abolished if the plan is implemented. Power utility PPC has already triggered this clause in reaction to rising CO2-related costs.

The existing SMP clause, currently triggered by all suppliers except for PPC, will be subject to strict rules, enabling consumers to know the cost of their bills with simplicity and precision by  factoring the SMP price into a formula for an immediate result, according to the RAE plan.

The complexity of the current billing system makes it difficult for consumers to make safe comparisons of supplier offers.