RAE, the Regulatory Authority for Energy, has given electricity retailers until the end of this month to provide detailed data concerning electricity bills issued for all customers between September 1, 2021 and May 31.
The authority has requested this information to check on tariff charges, whether wholesale price adjustment clauses have been applied in accordance with agreements signed between suppliers and customers, and if government subsidies included in bills have been properly calculated.
RAE considers this inspection necessary as a result of consumer suspicions of charging errors against their interests.
Meanwhile, RAE is also conducting hearings on two separate issues involving twelve electricity retailers. The first issue concerns whether suppliers have notified consumers on time for tariff changes. The second issue being examined is whether supplier tariffs and sale programs are transparent.
The number of low-voltage consumers switching electricity supplier doubled in May, compared to a month earlier, despite the energy ministry’s imminent energy-crisis measures to be introduced July 1, suggesting consumers are panic-stricken and lack composure for a wait-and-see approach.
Latest electricity market figures covering May, still unofficial, showed a further rise in the number of households resorting to the universal electricity supply service, covering the needs of black-listed consumers who have been shunned by suppliers over payment failures.
The number of low-voltage consumers who have resorted to this universal electricity supply service, which also rose in April, by 5,000, now exceed a total of 170,000, May’s unofficial data showed.
By law, the electricity market’s top five suppliers, based on market share, contribute to the universal supply service. Higher tariffs are charged.
Major-scale energy consumers are expressing growing interest in power purchase agreements with RES producers, but supply currently remains subdued.
Banks are playing a key role in this development as they are encouraging customers to establish PPAs by offering low interest rates as an incentive, a new banking offer, as was noted by a sector official at the recent Athens Energy Dialogues conference.
Banks, increasingly acknowledging that PPAs are the way forward, prefer ten-year PPAs, deemed as agreements that protect from dangers and risks, while also being suitable for the Greek market, according to sector officials.
Market players are already seeking professional PPA advice from consulting firms to prepare for their entry into this new territory.
The prolonged energy crisis has led to a sharp rise in overdue electricity bills as consumers struggle to meet exorbitant energy costs, amounts owed now double the level compared to six months ago.
According to sector officials, electricity bills overdue for periods of between 45 and 75 days represent the majority of cases. In this category, the rise in overdue electricity bills is close to 400 percent, clearly indicating that an increasing number of households and businesses are finding it extremely difficult to cover energy costs and meet deadlines.
The category of electricity bills overdue for up to 100 days has also experienced an increase, but it is far milder, suggesting that consumers are making every effort to not exceed this period, driven by the fear of electricity supply cuts.
Also highlighting the increased pressure experienced in the market, the number of electricity consumers resorting to a universal supply service covering the power needs of black-listed customers with poor track records exceeded 167,000 in April, increasing by 19,000 since the start of the year.
A rising wave of overdue electricity bills, highlighted by a sharp rise in the number of applications lodged by consumers for installment-based payments, is generating anxiety in the energy market as consumers face steep energy cost increases and suppliers battle against tightened cashflows while fearing a reemergence of unpaid receivables.
Consumers are now feeling the accumulative effect of an energy crisis that has lasted seven months and deteriorated since Russia’s recent invasion of Ukraine.
Consumer applications for installment-based payments have risen by more than 200 percent since September, 2021, generating fears of a new round of unpaid receivables, which would have a wider impact on the energy market’s stability.
The extent of the problem will become clearer in April when electricity bills are issued for consumption in March, a month during which wholesale electricity prices have skyrocketed to levels of approximately 300 euros per MWh as Russia’s war on Ukraine rages.
Many energy consumers who have so far managed to remain punctual with their payments could struggle to meet risen energy costs, energy company officials have informed energypress.
Prior to the energy crisis, the country’s annual electricity consumption of 55 TWh cost a total of nearly 3 billion euros, based on an average wholesale electricity price of 50 euros per MWh, several times below the current level of roughly 300 euros per MWh. If sustained throughout 2022, this price level would result in a national electricity bill of nearly 14 billion euros for the year.
Independent suppliers are set to offer discounts and tariff reductions to consumers, their effort focusing on consumption levels ranging between 300 and 600 kWh, not covered by state subsidies, according to latest updates.
Independent suppliers are awaiting the outcome of a meeting today involving energy minister Kostas Skrekas, during which state-controlled power utility PPC’s discount strategy will be clarified, before they take specific decisions, including for the consumption category of up to 300 kWh, applying to the majority of households.
Besides an across-the-board discount of 30 percent for all consumers, including the category up to 300 kWh, PPC has also promised an additional discount of between 3 and 4 percent for the 301-600 kWh category.
It still remains unclear how much the price gap between PPC and independent consumers offering lower tariff prices could be narrowed by this move.
Independent suppliers know well that they will need to keep offering lower tariffs than PPC, the dominant player, to remain competitive.
The government plans to adopt an Energy Transition Fund to offer electricity subsidies to households and small and medium-sized enterprises, heating fuel subsidies, and a range of other initiatives as a tool to contain the surge in wholesale energy costs, prompted by a combination of factors in international markets.
The country’s independent electricity suppliers have deemed as necessary government support measures just announced to help combat rising wholesale, and by extension retail, electricity prices pushed up by a combination of unfavorable factors in international markets, but, even so, feel betrayed by the manner in which these measures were presented, perceived as an indirect boost for the state-run power utility PPC.
Officials at independent electricity supply companies, in comments to energypress, pointed out that PPC was incorporated into the government’s announcement for support measures, creating an impression that the dominant player’s pricing policy is a part of the government measures for lower-cost electricity. In other words, PPC was made to look as if it is providing social policy on behalf of the government, the independent supply company officials protested.
This ultimately sends out a message promising consumers protection and lower-cost electricity at PPC, marring the image of independent players as relentless, profit-seeking enterprises, the representatives complained.
Such initiatives threaten to confuse consumers and stifle market competition, the representatives added.
Taking into account the rising energy costs and potential repercussions on society, the government is seeking to make revisions that would make more households eligible for subsidized electricity through the Social Residential Tariff (KOT) program.
The administration is looking to loosen KOT-related income and property criteria for the entry of several hundred thousand more households to the program.
The government also aims to increase the KOT subsidy program’s discount rates for electricity, currently ranging between 45 and 60 percent, depending on income levels, property assets and electricity consumption levels.
Under the current criteria, 450,000 households are eligible for electricity subsidies through the KOT program.
Additional funds are believed to be available to make the subsidies available to a greater number of households, but the finances may not suffice to cover the full extent of the expansion sought by the government.
Electricity suppliers, facing steep and lasting wholesale electricity cost increases, which have resulted in cash-flow issues, are seeking revisions that could alleviate the pressure, in recommendations submitted to RAE, the Regulatory Authority for Energy.
Rising wholesale electricity costs have created major cash flow problems for non-vertically integrated electricity suppliers as they are being forced to pay increasing amounts for electricity and related guarantees ahead of payments, to them, by consumers.
Consumers have also felt the pinch as suppliers, seeking protection against the rising wholesale prices, have activated wholesale cost-related clauses incorporated into their supply agreements.
Solutions for both sides seem elusive at present as market forecasts do not see any price de-escalation ahead, only further increases.
In one of the recommendations forwarded to RAE, suppliers called for their cash collateral payments made to the Hellenic Energy Exchange, as a form of guarantee, to be replaced by letters of guarantee representing equivalent amounts.
Suppliers have also requested a reexamination of the clearing price and payment formula in the day-ahead and intraday markets.
They also requested extensions for surcharge payments to power grid operator IPTO and the distribution network operator DEDDIE/HEDNO.