RAE to publish lists of suppliers not owing surcharges, sector reacts

RAE, the Regulatory Authority for Energy, has informed the country’s electricity suppliers it plans to start publishing monthly reports listing suppliers who do not owe electricity-bill surcharge amounts to operators as well as suppliers who owe such amounts but have reached settlement arrangements through installment programs.

Electricity suppliers were informed of this initiative, based on a RAE board decision reached on February 10, in a letter forwarded by the authority.

Through this initiative, RAE aims to pressure electricity suppliers into relaying electricity-bill surcharges to operators on time.

A number of electricity suppliers have fallen behind on these surcharge relays, which highlights the growing pressure faced by the energy market, as a whole, amid the energy crisis. Cashflow has tightened up for suppliers, facing steep wholesale prices, and an increased number of consumers are struggling to meet energy bills.

The situation has officials worried that a new wave of unpaid receivables is in development.

Certain electricity suppliers and market officials have reacted against the RAE measure, noting it will create far bigger problems rather than the ones it seeks to resolve.


Supplier surcharge relay delays to operators on RAE agenda

Details of accumulated electricity-bill surcharge payment delays by electricity suppliers to market operators will be examined at a RAE (Regulatory Authority for Energy) board meeting tomorrow to involve the participation of three market operators, distribution network operator DEDDIE/HEDNO, power grid operator IPTO and RES market operator DAPEEP.

The progress of agreements concerning installment-based payments by electricity suppliers to operators for overdue surcharge amounts totaling 347 million euros up until October, 2020 will be on tomorrow’s agenda.

Suppliers owing this surcharge amount have faced penalties for their delays. The suppliers reached agreements to cover 50 percent of surcharge amounts owed with letters of guarantee and settle the remainder through installments over periods ranging from 8 to 10 months.

Besides updates on older surcharge amounts owed by suppliers, the three operators, at tomorrow’s RAE meeting, will also be asked to provide details on more recent unpaid surcharges, especially amounts concerning 2021.

According to RAE officials, a total of 12 electricity suppliers have fallen behind on surcharge payments since October, 2020, leading to an accumulated amount, since that month, of approximately 250 million euros. This figure remains unconfirmed. Tomorrow’s meeting will offer a clearer picture.

In addition, the failure of suppliers to relay municipal-related surcharges, currently worth a total of between 60 and 70 million euros, to municipalities will also be discussed at tomorrow’s RAE board meeting. In some cases, these delays have stretched for periods of up to 18 months.

This issue was discussed at a meeting yesterday between energy minister Kostas Skrekas and representatives of the Central Union of Greek Municipalities (KEDE), who called for a revision that would require electricity suppliers to relay surcharge amounts to municipalities within two months.


Suppliers skip surcharge payment credit offer for May

Electricity suppliers have ignored a credit option made available by the energy ministry for 30 percent of regulated-charge payments to operators.

A gradual improvement in electricity-bill payment records by consumers, combined with the offer’s credit terms, generally deemed unappealing and risky, appears to have stopped suppliers from taking advantage of the measure.

Not a single electricity supplier chose to utilize the credit offer for April-invoiced  surcharge payments to power grid operator IPTO by a May 15 deadline.

Surcharges included in energy bills are paid by consumers and then relayed by suppliers to operators.

Suppliers showed little interest in the offer a month earlier. Just four suppliers chose to utilize the credit offer for March surcharge payments due in April.

The energy ministry acted swiftly to prepare and introduce this credit offer as a cash-flow relief measure amid fears of major energy-bill payment delays by consumers.

Consumers have improved their energy bill payment records over the past few weeks following a deterioration early in the lockdown. This upward trajectory has so far spared suppliers of cash-flow dramas.

Deferred surcharge payments must be settled four months down the road, along with any other existing obligations, according to the ministry’s credit offer extended to suppliers. They have adopted a cautious stance, fearing debt accumulation.

According to some sources, a number of suppliers have chosen to informally delay their relay of surcharges to the operator rather than take up the credit offer.


Suppliers leaving credit offer on regulated charges for later

Electricity suppliers appear to be leaving a credit-availability option covering 30 percent of regulated-charge payments to operators for tougher times.

Just four suppliers have advantage of the measure since it was introduced by the government about a month ago to ease the pressure on suppliers of payment obligations to power grid operator IPTO, energypress sources informed.

Despite needing to deal with bigger electricity-bill payment delays by customers, suppliers, who depend on these payments to collect surcharges and relay the amounts to operators, have yet to feel extreme cash-flow pressure amid the unfavorable market conditions, market officials explained.

Suppliers are fully aware of the fact that any regulated charges not paid now will need to be settled four months down the road, along with other obligations at the time.

This threat is making suppliers tread carefully at present to avoid an accumulation of future payments too big to handle.

Suppliers must fully cover 70 percent of regulated charges, plus VAT, in order to qualify for the credit offer covering the other 30 percent.

PPC chief supports use of CO2 clause, simplification expected

Power utility PPC’s chief executive Giorgos Stassis has defended the company’s need to maintain a CO2 cost clause included in its electricity bills as protection against emission cost increases, at a meeting with RAE (Regulatory Authority for Energy) officials.

The authority is working on revisions aiming to simplify electricity-bill clauses for greater transparency to household and business consumers.

Numerous complaints have been made by customers feeling confused by the current terms. RAE wants to establish terms enabling clearer price comparisons of supplier terms.

PPC’s right to maintain its CO2 clause has been questioned. At the RAE meeting, held yesterday as part of ongoing public consultation, the power utility’s chief contended creditor banks insist on the measure’s maintenance, adding its cancellation would require further electricity tariff hikes.

RAE may decide to continue permitting CO2 clauses once the target model is introduced, according to sources. If so, the current format will be revised to  offer consumers clarity, the authority has already stressed. Decisions are expected in about two weeks.

PPC counting on three extra revenue sources for financial rebound in 2019

The main power utility PPC will be counting on three sources promising additional revenues worth well over 400 million euros for a return to profit territory in 2019, as was recently forecast by the utility’s CEO Manolis Panagiotakis.

PPC will be spared of its supplier surcharge contribution to the RES special account in 2019 as this obligation has been cancelled for all suppliers. PPC provided 196.3 million euros of supplier surcharges in 2018. In addition to this favorable development for PPC, the power utility also stands to receive 100 million euros in returns from the RES special account, the lion’s share of a 121 million-euro surplus in 2018.

Moving on from the supplier surcharge-related benefits, PPC can look forward to additional revenues of roughly 60 million euros as a result of its decision to reduce a punctuality discount offered to consumers paying their electricity bills on time to 10 percent from 15 percent.

PPC can also anticipate roughly 200 million euros from public service compensation (YKO) returns planned for this year.

On the downside, PPC faces higher CO2 emission right costs. They ranged from 14.48 to 25.57 euros per ton last year and have escalated to levels between 18.94 and 27.53 euros so far this year.



Pending revision stopping supplier surcharge returns

A decision by the energy ministry to return a supplier surcharge amount worth approximately 120 million euros to electricity suppliers as a result of a RES special account surplus in 2018 has yet to be executed because a legislative revision needed following a RES market operator name change from LAGIE to DAPEEP has yet to drafted and ratified.

These surcharge returns to suppliers are not expected to happen any time soon and will most certainly not be incorporated into first-half financial figures, according to sources.

As the dominant electricity retailer, the main power utility PPC expects to receive the bulk of this total, estimated at 100 million euros.

A law enabling the surcharge return to suppliers was ratified before the name change at the RES market operator and does not include its new title as DAPEEP.

RAE, the Regulatory Authority for Energy, has refused to take any steps unless this complication is resolved.

The surcharge returns to be returned to suppliers for 2018 total 121.12 million euros following the deduction of a 70 million-euro safety reserve required by law.

Calculations also still need to be made concerning pending smaller amounts of previous years.

The overall delay has further unsettled RES producers, experiencing increased payment delays for their output since last summer.

Independent firms, facing tight conditions, turn to hike clause

Many, if not most, independent electricity suppliers, moving to counter stifling market conditions caused by higher wholesale prices that are severely narrowing profit margins, have begun activating a System Marginal Price (SMP) clause for proportionate upward adjustments of charges in an effort to remain sustainable.

SMP, or wholesale price, levels of up to 55 and 60 euros pr MWh are regarded as an upper limit before the clause, included in supplier agreements but not resorted to until now, is activated. In recent times, however, the SMP has consistently stood at over 65 euros per MWh.

Until now, independent suppliers have hesitated to activate this SMP clause fearing negative customer reactions, but market conditions have tightened up too much for it to be neglected.

The still-dominant main power utility PPC is continuing to offer customers a 15 percent discount for punctual electricity bill payments.

Besides the higher SMP levels, independent suppliers have had to absorb elevated prices at recent NOME auctions – these were introduced about two years ago with the intention of making lower-cost electricity available to emerging players – and have also faced difficulties importing lower-priced electricity from abroad.

Independent electricity suppliers fear 2019 could be their most difficult year yet since emerging relatively recently. A supplier surcharge is set to be lifted but all other market conditions are seen as unfavorable.


Energy Exchange prompts 62.23% supplier surcharge reduction

The establishment of the Greek Energy Exchange has led to a significant 62.23 percent reduction of the supplier surcharge, related budget data covering June 19 to June 30, has shown.

The figures are based on supplier operating costs for 2018 submitted by the Greek Energy Exchange to RAE, the Regulatory Authority for Energy, which has yet to offer its endorsement.

The supplier surcharge reduction is expected to be revised to 55.16 percent once other regulations are imposed.

The Greek Energy Exchange is expected to make corrections, if needed, following RAE’s approval of the figures.