ETMEAR

Industry opposes RES surcharge as competitive pricing component

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Energy-intensive industrial producers strongly oppose an energy ministry plan to change the status of a RES-supporting ETMEAR surcharge included in electricity bills from a  regulated to competitive fee by having it incorporated into the pricing policy of suppliers, EVIKEN (Association of Industrial Energy Consumers) sources have informed energypress.

The industrial producers have cited two key reasons for their disapproval. Firstly, changing the ETMEAR surcharge into a competitive component of supplier pricing policy would terminate the ability of industrial consumers to receive related compensation as, based on EU state aid directives, compensation is permitted for regulated charges but not competitive charges.

In addition, industrial consumers oppose an ETMEAR status change as a new energy exchange platform promises to offer strong incentive for new RES units to participate in competitive procedures to secure agreements with energy suppliers. This essentially means that fewer, if any, RES units will remain available for bilateral agreements with industrial producers, who are counting on such arrangements for an urgently needed reduction of energy costs in the medium term.

The resilience of manufacturers is already being seriously tested by recent energy price increases brought about by the energy crisis.

RES supporting surcharge now a competitive component of bills

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The energy ministry is working on a plan to change the status of a RES-supporting ETMEAR surcharge included in electricity bills from regulated to competitive by having it incorporated into the pricing policy of suppliers, the objective being to reduce the burden of this surcharge for consumers.

The initiative represents part of the ministry’s wider effort to restructure the RES special account, remunerating renewable energy producers.

The anticipated reduction of the ETMEAR level is expected to be offset by revenues that will be generated by green certificates to be auctioned off by DAPEEP, the RES market operator, a plan taking its cue from a formula adopted in a number of EU member states, including the Netherlands and Poland.

Green certificate revenues could reach as much as 600 million euros per year, energypress sources informed.

Under the new system, suppliers will need to purchase a minimum number of green certificates in proportion with their sales, securing a revenue source for the RES special account.

DAPEEP will no longer need to collect revenues from consumers, instead collecting from suppliers through the new mechanism.

Suppliers summoned to explain overdue surcharge transfers

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RAE, the Regulatory Authority for Energy, has summoned power utility PPC and six independent electricity suppliers to hearings for explanations on overdue surcharge amounts they have yet to transfer to three market operators.

The authority had initially requested related data and explanations from suppliers and has now taken a further step by deciding to stage hearings for PPC and two other suppliers, followed by supplementary hearings involving a further four suppliers.

The three market operators, power grid operator IPTO, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP, will also be called upon by the authority to offer data on the overdue surcharge transfers by suppliers.

According to sources, RAE authorities are examining a variety of surcharges, including network transmission, distribution network and RES-supporting ETMEAR surcharges, up until October, 2020.

These surcharges, included in electricity bills and paid by consumers as part of their electricity bills, must then be handed over by suppliers to respective operators within a specific time period.

Conditions have recently deteriorated for electricity suppliers, primarily as a result of considerably higher wholesale costs since November’s launch of the target model’s new markets.

Electricity suppliers contend that amounts owed to them by the operators outweigh their unpaid surcharges and, as a result, want accounts offset. RAE has rejected this request.

Suppliers unsettled by revised, retroactive RES surcharge

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Electricity suppliers have been unsettled by new RES-supporting ETMEAR surcharge conditions requiring them to apply new rates to medium-voltage customers retroactively, as of January 1, 2019.

There has been much mobility in the medium-voltage market as customers have often switched suppliers. The new retroactive requirement has caused confusion as medium-voltage customers may no longer be with the suppliers they were at in 2019, and, furthermore, being enterprises, they may even no longer exist. The obligations of suppliers remain unclear for such cases.

The ETMEAR surcharge framework has just been implemented after being postponed on a number of occasions.

A small number of enterprises will be required to pay smaller ETMEAR amounts, while most will need to pay higher amounts.

Certain industrial enterprises will be charged a reduced rate, 15 percent of the average ETMEAR figure, set at 17 euros per MWh.

The new ETMEAR surcharge for medium-voltage consumers belonging to other business categories, the overwhelming majority, including hotels, retail chains, banks, and low-intensity industries, is 17 euros per MWh, up from the previous rate of 9 euros per MWh. This increased rate will apply retroactively as of January 1, 2019.

 

Industrial sector needs delayed demand response mechanism

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The country’s energy-intensive industrial enterprises are keen to accept a solution that would also offer independent electricity suppliers access to power utility PPC’s lignite-based generation, acknowledging that delays in the government’s ongoing negotiations with the European Commission on across-the-board lignite issues will consequently delay Brussels’ approval of Greece’s request for an extension of the demand response mechanism, a key energy-saving tool for the industrial sector, and threaten the sustainability of a number of producers.

EVIKEN, the Association of Industrial Energy Consumers, recently informed the energy ministry of its position in writing.

Greece’s lignite-issue negotiations with the European Commission have dragged on for some time. Athens has received a list of new questions after responding to a dense set of previous questions.

The government’s proposal for an extension of the demand response mechanism was forwarded to Brussels late December following lengthy consultation with European Commission officials to ensure its details would be aligned with Brussels’ directives.

Even so, Greece’s industrial enterprises have been left without the support of demand response mechanism since February 7. Worse still, a new measure promising to reduce the cost, for industry, of a RES-supporting ETMEAR surcharge, has yet to be implemented.

As a result, certain industrial sectors, namely steel and cement, have slid further in terms of competitiveness while, in some cases, sustainability and job maintenance are also at stake.

Pundits believe Brussels has bundled together all of Athens’ pending energy sector issues.

Electricity suppliers financially pressured by coronavirus crisis

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Electricity suppliers are feeling the financial effects of the coronavirus crisis, threatening to increase the level of electricity bill arrears amid reduced consumption and lower sales.

Consumers are now contacting suppliers to request installment-based payment arrangements, or, worse still, expressing an inability to meet electricity bill payments, energypress has been informed.

Retailers and small businesses whose operations are being stifled by the coronavirus lockdown are particularly feeling the pressure.

Electricity suppliers maintaining a dominant mid-voltage customer base are very concerned as the coronavirus spread has already begun inflicting financial damage on sectors such as tourism, hotels and restaurants, all expected to be particularly affected by the ongoing crisis.

Retailers, too – except for supermarket chains, registering rising sales figures – are also under severe pressure. Their position will deteriorate further as a result of a government decision temporarily shutting down most shops as of today.

Electricity suppliers are more or less helpless at present. Distribution network operator DEDDIE/HEDNO would not execute any electricity-cut orders amid these extraordinary conditions.

Subsequently, suppliers are calling for a delay of their payments to operators such as power grid operator IPTO, DEDDIE, and RES market operator DAPEEP for network usage fees, a RES-supporting ETMEAR surcharge and other such obligations.

 

Second electricity bill surcharge cut in two months imminent

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Electricity consumers can expect a second cost reduction in two months, a public service compensation (YKO) surcharge cut for nighttime electricity consumption, once a wide-reaching energy ministry draft bill is ratified.

The bill will cover the electricity market’s further liberalization, power utility PPC’s modernization, gas utility DEPA’s privatization and RES sector support.

This latest electricity surcharge cost reduction follows a RES-supporting ETMEAR surcharge rate cut in September.

Public service compensation surcharge rates concerning nighttime electricity usage will be reduced for consumption levels exceeding 1,600 kWh. This cut promises to ease electricity-based heating costs for households this coming winter.

The energy ministry intends to decide on the extent of the surcharge reduction once the aforementioned draft bill has been ratified.

YKO surcharge costs concerning nighttime electricity consumption increased for households at the beginning of 2018 when a low flat-rate formula was replaced by one gradually increasing the surcharge rate in accordance with usage levels, as is the case for daytime consumption.

RAE, the Regulatory Authority for Energy, has proposed an YKO surcharge rate reduction from 0.085 euro to 0.03 euro per kWh for nighttime consumption of over 2,000 kWh and a cut from 0.05 euro to 0.015 euro per kWh for consumption levels between 1,600 and 2,000 kWh.

YKO rates for nighttime electricity consumption have been equated with daytime rates since January 1, 2018. These are 0.00690 euro per kWh for electricity consumption between 0 and 1,600 kWh, 0.05 euro for consumption between 1,601 and 2,000 kWh and 0.085 euro for consumption of 2,001 KWh and over.

Households, businesses to cover bulk of PPC rescue plan’s cost

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Households and businesses using low and medium-voltage electricity will shoulder most of the weight of a rescue plan prepared for troubled power utility PPC as these consumer groups  will end up covering 350 million of 490 million euros in additional revenues to be generated by the plan’s revised pricing policy.

Of this 350 million-euro amount to be covered by households and businesses, 250 million will stem from tariff hikes; 68 million will result from a punctuality discount reduction for low-voltage consumers; 16 million from a punctuality discount cut for medium-voltage consumers; and 16 million euros from the termination of a punctuality discount offered for CO2 emission right costs in the medium-voltage category.

PPC’s electricity tariff hikes, just introduced, include a 16.8 increase to 0.11 euro per kWh for consumption up to 2,000 kWh. A 16.5 percent tariff hike has been imposed on consumption of 2,000 kWh and over, taking the rate to 0.11946 euro per kWh.  Nighttime tariff rates have been increased by 19.4 percent to 0.07897 euro per kWh.

A RES-supporting ETMEAR surcharge included on electricity bills has been reduced by 25 percent to 0.017 euros for low-voltage household consumers to partially offset the tariff hikes.

The aforementioned rate revisions, along with a VAT reduction from 13 to 6 percent on electricity bills, will result in annual electricity cost increases of between 30 and 60 euros for consumers requiring 3,300 kWh.