gas distribution surcharge

Surcharge relief measures for gas consumers, industry, farms

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The energy ministry is preparing to suspend natural gas bill surcharges for the difficult winter months ahead, to help consumers not eligible for electricity bill subsidies cope with extremely high prices brought about by the energy crisis.

Energy minister Kostas Skrekas has submitted a related draft bill to parliament that will suspend gas network usage surcharges for November and December. The amounts to be saved, however, will need to be equally divided by suppliers into four monthly installments payable by consumers as of April, 2022.

Natural gas suppliers will also be offered corresponding cost relief through the measures. Their surcharge payments to operators, normally forwarded after having being received from consumers, will be delayed and divided into monthly installments beginning in March next year.

The draft bill also includes cost-relief measures for industrial and agricultural consumers, whose surcharges for public service compensation (YKO) will be suspended between November 1, 2022 and March 31, 2022.

The public service compensation account is currently in surplus territory as a result of amounts saved by the Cretan grid interconnection with the Peloponnese. Previously, high-cost units in Crete were subsidized through the YKO account.

RAE ‘not referring to EDA THESS’ when raising need for closer monitoring

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Gas distributor EDA THESS is definitely not one of the sector’s companies the RAE (Regulatory Authority for Energy) chief was referring to when stating that the Greek energy market’s gas and electricity operators require closer monitoring so that consumers can benefit from lower surcharges and improved services, EDA THESS General Manager Leonidas Bakouras has stressed in a swift response to remarks by RAE chief executive Thanassis Dagoumas.

The regulatory authority’s plan includes commissioning certified auditors to inspect the financial data of market operators.

In a written statement, the EDA THESS general manager noted that, through efficient technical and financial management of the distribution networks in the Thessaloniki and Thessaly areas, the company has achieved Greece’s lowest distribution surcharges, since the end of 2016, while distribution surcharge reductions in Thessaloniki and Thessaly for 2021 are at 15 and 22 percent, respectively, compared to 2020.

Distribution surcharge reductions in 2021 for Thessaloniki and Thessaly industrial consumers are even greater, down 45 and 56 percent, respectively, proving that EDA THESS is already contributing to minimizing costs for consumers, Bakouras added.

 

Major gas distribution tariff cuts a boost for industry

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EDA THESS premises in Thessaloniki were visited by the President of the Federation of Industries of Greece (SBE), Mr. Athanasios Savvakis where he was welcomed by the General Manager, Mr. Leonidas Bakouras and executives of the Company.

During the meeting, the General Manager informed about the approved Development Plan 2021-2025 amounting to ~ 156 million € which is already being implemented supporting the development of the areas of responsibility of EDA THESS. As part of this ambitious Program, the Company aims to integrate more and more industries in the gas distribution network. The expansion of natural gas use to energy-intensive production units leads to an increase in their energy efficiency, to a reduction in the energy cost while at the same time environmental performance is improved.

It is worth noting that in 2020, for the region of Thessaloniki the industries MEL SSA, MEVGAL SA, Souroti SA, Roka SA, Onassis SA, B. Maliouris SA and the new gas station using CNG of EKO SA in Thessaloniki signed a connection contract, while for Thessaly the companies HELLENIC DAIRIES SA, AGRODER IKE, VIOLAR SA, CVBTECH HELLAS MIK, D,KISSA BROS & CO OE.

At the same time, Mr. Bakouras pointed out that the critical decline of distribution tariffs derives from the development planning, consistent and full implementation of an integrated strategy with profitable investments, based on technical and economic criteria. From the 1st of January the weighted average distribution tariff of EDA THESS that has been approved by the Authority shows a further decline of 14.8% in Thessaloniki and 21.9% in Thessaly, compared to the previous regulatory period.

Even more impressive is the reduction for the industrial consumers, who now enjoy reduced distribution tariffs by 45% in Thessaloniki and 56% in Thessaly compared to the distribution tariff applied in the previous regulatory period.

For his part, Mr. Savvakis expressed his satisfaction for the shaping of distribution prices at lower levels. He stressed that such a development is quite positive for the productive base and acts as an accelerator in attracting new investments, turning the region into an investment hub. By this way, the interest of investors for the development of companies in the industrial sector is mobilized, as a healthier, more flexible, and competitive environment with low energy costs is established. In this direction, EDA THESS through targeted investments, further strengthens the perspective of infrastructure development both in Northern Greece and in other areas of its License.

In line with the National Plan for Energy and Climate objectives, EDA THESS achieves the increase of natural gas penetration, contributing to the boost of the productive restructuring.

Gas distributors want surcharge rebate decision cancelled

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Gas distributors DEDA, EDA Thess and EDA Attiki will seek the nullification of a decision by RAE, the Regulatory Authority for Energy, requiring them to gradually reimburse industrial enterprises for increased network surcharges  between August 14, 2015 and December 1, 2016.

The RAE ruling was delivered following a complaint by EVIKEN, the Association of Industrial Energy Consumers.

The amount that needs to be returned by the three distributors to energy-intensive industries is estimated to be between 2.5 and three million euros.

As a first step, DEDA, EDA Thess and EDA Attiki will apply for the RAE decision to be nullified and, if unsuccessful, will then resort to legal action, including at the Council of State, Greece’s Supreme Administrative Court.

A bill ratified in 2015 enabled the gas distributors to impose a temporary network surcharge of 4 euros per MWh, prompting a reaction from energy-intensive industries.

EVIKEN argued that the increase in distribution charges did not reflect the costs of each distributor, was a disproportionate burden for certain categories of network users, while adding that distribution charges should be set by RAE, not through legislation.

According to the RAE decision, the gas distributors will need to introduce measures reimbursing industrial consumers for higher network surcharge payments over the aforementioned 16-month period. Payment of the reimbursements, to be determined by a specific formula, will be possible through installments over a period of as long as five years, according to the RAE decision.

Brussels recognizes EVIKEN case on excess distribution surcharges

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An ongoing effort by EVIKEN, the Association of Industrial Energy Consumers, calling for natural gas distribution operators to return excess surcharges to industrial consumers has – for the first time since the case’s launch four years ago – been recognized by the European Commission and included in its latest report on the Greek economy.

RAE, the Regulatory Authority for Energy, will reach a decision imminently, within May, according to the Brussels report.

EVIKEN launched its case in June, 2016. Industrial consumers were charged excess gas distribution surcharges for a 16-month period beginning in August, 2015.

EU law was breached by legislation ratified to enable the excess surcharge, upped to 4 euros per MWh, universally, regardless of company profile. This placed major-scale industrial producers under pressure.

A decision on this overcharging case has remained pending since 2016 despite wide recognition of the violation authorities at all levels, from RAE to the European Commission’s Directorate-General for Energy.

RAE, over an extended period, has needed to respond to rigorous questioning from the DG-Energy on various aspects concerning the matter.

RAE is now expected to calculate the precise excess surcharge amount that needs to be returned by operators to industrial consumers through an offsetting of accounts.

“Our case may have been forgotten if it weren’t for the DG-Energy leadership’s decisive intervention that prompted RAE to overturn all the unsubstantiated legal interpretations by natural gas distribution operators,” noted Antonis Kontoleon, the head official at EVIKEN.