Month-to-month pricing obligation resulting in market ‘regression’

A leading Greek energy market authority has expressed strong reservations about the financial repercussions of a new pricing model imposed last July on electricity suppliers, concluding the new system will ultimately result in market regression, while also questioning the new system’s legal standing.

These reservations and concerns were expressed by Miltos Aslanoglou, general manager of ESPEN, the Greek Energy Suppliers Association, at the 2nd Energy Law Forum.

Under new market rules, electricity suppliers in Greece are required to announce each forthcoming month’s electricity prices by the 20th of the preceding month.

Measures decided on by authorities for implementation should be thoroughly designed to be effective under various conditions, not just specific circumstances, the ESPEN official stressed.

Had the pricing mechanism been introduced sooner, such as last April, when electricity prices were surging, the country’s electricity suppliers would most probably have been threatened by bankruptcy or even gone out of business, Aslanoglou contended.

Windfall earnings of suppliers, he noted, have created a strange combination where suppliers are spending funds from the previous month to service their portfolios for the next month at a time when market prices have fallen below projected levels.

Such a combination of events can only be circumstantial, the ESPEN official noted, pointing out windfall profits should be limited but based on the financial statements of companies, not pricing regulations.

 

 

ESPEN wants power supply cuts for consumers on the move

ESPEN, the Greek Energy Suppliers Association, wants power supply cuts for consumers with unpaid power bills even if they have moved to a new supplier, citing serious energy-related debt issues caused by consumers shifts from one supplier to another to avoid settlement of unpaid bills.

According to sources, suppliers have experienced soaring unpaid receivables in recent times, consumers taking advantage of flexible market terms enabling shifts from one supplier to another, even with unpaid bills. Under the current rules, suppliers cannot order supply cuts to consumers with arrears.

More than 50 percent of unpaid receivables concerns customers who have switched electricity suppliers, according to market estimates.

Suppliers want greater clarity on new customer switching rules

Electricity suppliers have agreed, in principle, on new rules proposed by RAE, the Regulatory Authority for Energy, for customer switching, but demand greater clarity on a rule concerning the imposition of an upper limit on outstanding bills owed by customers seeking to switch suppliers.

Seven suppliers – power utility PPC, Protergia (Mytilineos Group), Heron, Elpedison, Volterra, Zenith and Fysiko Aerio/Hellenic Energy Company – and two associations – ESPEN (Greek Energy Suppliers Association), ESEPIE (Hellenic Association of Electricity Trading & Supply Companies) – took part in second-round public consultation staged by RAE, requesting views on three topics.

Preparations for the introduction of a debt-flagging system – the public consultation procedure’s second topic – offering general protection to suppliers by informing and preparing them on the track records of incoming customers, are headed in the right direction, participants agreed.

They also backed a RAE proposal that would permit suppliers to request electricity supply cuts from distribution network operator DEDDIE/HEDNO for exiting customers who have not settled outstanding electricity bills.

This measure promises to contribute to more effective management of electricity-bill debt and support supplier receivables, participants pointed out.

RAE, in its proposals, sets a six-month limit for suppliers to take action against customers once they have switched companies.