ESPEN

Supplier switching burdens sector with extra €300-400m in unpaid receivables

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Electricity users switching suppliers and leaving behind unpaid bills have burdened the sector with an additional 300 to 400 million euros in unpaid receivables over the past couple of years, a major issue impacting cash-flow in the sector, a leading official has noted.

Giannis Mitropoulos, general manager at ESPEN, the Greek Energy Suppliers Association, speaking at a news conference, referred to energy supplier Fysiko Aerio as a typical example, noting that 50 percent of the company’s unpaid receivables concern customers who have switched supplier.

Most electricity retailers have seen their unpaid receivables figures roughly double over the past couple of years or so as a result of loosened regulations concerning customer switching.

Back in 2020, the Council of State, the Supreme Administrative Court of Greece, abolished rules restricting customers with outstanding debt from switching suppliers.

The problem for suppliers was further exacerbated by a recent retail market rule, introduced last August, enabling electricity users to switch suppliers as frequently as once a month, without any subsequent penalties.

In an effort to combat the problem, ESPEN is working on a collective data base that will enable suppliers to monitor the track records of any prospective new customers. The association intends to launch the monitoring system in about a year’s time. The telecommunications sector has already adopted such a protection tool.

 

Market players call for end to measures in DG Energy meet

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Key local energy market players, meeting yesterday with the European Commission’s Directorate-General for Energy Ditte Juul-Joergensen, in Greece to take part in the ongoing Delphi Economic Forum, have called for emergency energy crisis measures implemented in the wholesale and retail electricity markets to be lifted.

The European Commission official informed that the Directorate-General for Energy plans to publish an impact assessment of temporary energy crisis measures adopted throughout the EU by the end of the month.

Juul-Joergensen asked her meeting’s participating energy market officials to name existing problems and challenges resulting from the energy crisis, discuss how these have been countered, and propose two to three energy policy priorities for Greece and the EU over the next few years.

Besides calling for an end to emergency energy crisis measures implemented in electricity markets, or more specifically, a cap on electricity producer earnings, representatives of ESAI, the Hellenic Association of Independent Power Producers, requested the establishment of a new availability market, either for available capacity or available flexibility capacity.

Representatives of ESPEN, the Greek Energy Suppliers Suppliers Association, who also took part in the meeting, noted that temporary energy subsidies provided in Greece have proved effective in protecting consumers from unprecedented electricity price increases, adding, however, that emergency measures implemented in the wholesale and retail markets have greatly impacted competition.

The pros and cons of measures adopted need to be carefully assessed before any extensions are granted, ESPEN officials noted.

The Greek government has submitted a request to Brussels for an extension of emergency energy market measures until the end of the year. The request is being assessed, Juul-Joergensen informed, without specifying when a decision could be reached.

 

Top energy sector officials taking part at Power & Gas Forum, March 22-23

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The government’s top-ranked energy sector officials as well as a host of other leading figures from political, institutional, academic and business domains will be talking part in the Power & Gas Forum on March 22 and 23 at the Wyndham Grand Athens Hotel, an event being staged by energypress for a fourth time. Conference speakers and attendees will participate in person.

Speakers at the event will include Greek energy minister Kostas Skrekas; the energy ministry’s secretary-general Alexandra Sdoukou; secretary-general of transport at the ministry of infrastructure and transport Ioannis Xifaras; RAE (Regulatory Authority for Energy) president Athanasios Dagoumas; EFET’s (European Federation of Energy Traders) Jerome Le Page; Tomás Llobet of European Energy Retailers (EER); two former Greek energy ministers, Giannis Maniatis and Giorgos Stathakis; Sokratis Famellos, a member of the main opposition leftist Syriza party; and Haris Doukas of the PASOK-KINAL socialist party.

Other conference participants will include power grid operator IPTO’s chief executive officer Manos Manousakis and his deputy Giannis Margaris; gas grid operator DESFA’s chief executive Maria Rita Galli; RES market operator DAPEEP’s president and CEO Giannis Giarentis; distribution network operator DEDDIE/HEDNO’s chief executive Anastasios Manos; EDEYEP (Hellenic Hydrocarbons and Energy Resources Management Company) president Aristofanis Stefatos; the Hellenic Energy Exchange’s newly appointed CEO Alexandros Papageorgiou; EDA THESS general manager and EDA ATTIKI CEO Leonidas Bakouras; the Greek prime minister’s special adviser for energy Nikos Tsafos; energy ministry adviser Theodoros Tsakiris; and energy markets guru Alex Papalexopoulos.

The academic community will be represented by professors Pantelis Kapros, Stavros Papathanasiou, Pantelis Biskas, Nikolaos Hatziargyriou and Antonis Metaxas.

As always, energy-sector authorities will also participate at the event. They include Loukas Dimitriou (ESAI/HAIPP – Hellenic Association of Independent Power Producers); Antonis Kontoleon (EVIKEN – Association of Industrial Energy Consumers); Giannis Mitropoulos and Miltos Aslanoglou (ESPEN – Greek Energy Suppliers Association); Irodotos Antonopoulos (ESEPIE – Hellenic Association of Electricity Trading & Supply Companies); Panagiotis Lostarakos and Panagiotis Papastamatiou (ELETAEN – Greek Wind Energy Association); Stelios Loumakis (SPEF – Hellenic Association of Photovoltaic Energy Producers); and Stelios Psomas (SEF/HELAPCO – Hellenic Association of Photovoltaic Companies).

Key sector entrpreneurs and executives who have so far confirmed their participation include: Ioannis Kalafatas (Mytilineos); Kyriakos Kofinas (PPC); Nikolaos Zahariadis (Elpedison); Anastasios Lostarakos (NRG); Dinos Nikolaou (Energean); Kostis Sifnaios (Gastrade); Nikolaos Satras (Dioryga Gas); Panos Nikou (Volterra); and Ioannis Kokkotos (ABB).

The forum’s full agenda will be finalized and announced in the coming days.

Indexation clause termination leads to higher nominal prices

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Though consumers have benefited from tolerable electricity tariffs over the last six months, courtesy of subsidies, the termination of indexation clauses in electricity bills has led to inflated nominal charges as tariffs incorporate the risk suppliers need to take when predicting the next month’s wholesale price levels ten days in advance.

New market rules introduced last August require suppliers to set and announce their electricity tariffs for each forthcoming month by the 20th of the preceding month.

The risk faced by suppliers through this new retail electricity market model has driven their nominal tariffs 20 percent higher, on average, compared to the previous system of floating tariffs with indexation clauses, triggered whenever wholesale prices exceeded certain limits.

Had the indexation clauses been maintained, power utility PPC, the dominant market player, would have recorded an average nominal retail price of 40.86 cents per KWh for the past six months, 28 percent below its average of 52.25 cents per KWh under the new system requiring the company to forecast wholesale price levels for each forthcoming month.

Market officials, including ESPEN, the Greek Energy Suppliers Association, had warned the new market model requiring wholesale electricity price forecasting would push up nominal retail prices, especially during times of market volatility, as is the case at present.

 

Suppliers want power cuts for roving consumers with arrears

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Electricity suppliers are pressuring authorities for measures protecting them against energy-bill debt left behind by consumers switching to other suppliers.

Two industry associations, ESAI/HAIPP, the Hellenic Association of Independent Power Producers, and ESPEN, the Greek Energy Suppliers Association, are believed to have forwarded proposals to the energy ministry for measures protecting electricity suppliers against consumers on the run.

The energy ministry launched a related consultation procedure approximately one month ago.

According to sources, electricity suppliers want the energy ministry to establish a law permitting them to cut power supply to customers who have switched to other suppliers for up to 90 days following their respective moves, if they still owe amounts to previous suppliers.

This rule would require consumers who have switched suppliers, leaving behind outstanding electricity bill amounts, to settle arrears within a 90-day period, either through full payments or installments, or have their electricity supply cut.

Electricity suppliers have been under increased pressure as a result of a growing amount of unpaid electricity bills during the energy crisis as well as the absence of rules countering consumers who rove from one supplier to another as a means of avoiding electricity-bill payments.

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

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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

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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

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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.