Electricity consumer switches reach 285,000 in first half

A total of 285,000 households switched electricity supplier in the first half of 2020, while less than one in eight have made the shift over the past five years, retail electricity market data made available to energypress has shown.

Since 2015, when the retail electricity market was essentially liberalized, 986,000 consumers of 7.58 million in total have switched electricity suppliers, the data showed.

This slow movement has kept power utility PPC’s retail electricity market share at relatively high levels. The corporation held a 67.61 percent share at the end of August, the data showed.

Customers who have taken the decision to switch to independent suppliers have also displayed strong loyalty. Just 144,000 electricity consumers have moved on for a second time during the five past years, according to the data.

Of the 285,000 consumers who switched suppliers in the first half, 208,000 left PPC, while nearly 35,000 ended up with a universal supply service provided by the market’s top five suppliers, at higher tariff rates, to households and small businesses rejected by their regular suppliers for unpaid bills.

 

Supply cut orders on the rise, suppliers toughening stance

Electricity suppliers forwarded 360,644 supply cut orders to the distribution network operator DEDDIE/HEDNO in 2019, most of these presumably targeting regular electricity bill dodgers. A total of 227,418 orders were executed, indicating the operator has toughened its stance, data released by RAE, the Regulatory Authority for Energy, has shown.

Nearly half of these consumers, or 111,298, who had their electricity supply cut by DEDDIE/HEDNO rushed to either fully settle amounts owed or register for installment-based payback programs in order to be reconnected to the network by the operator.

Subsequently, a considerable number of consumers, 116,120 in total, were left without electricity. 

Some of the electricity supply cut orders forwarded by suppliers to the distribution network operator may have been initiated by consumers no longer wishing to be serviced for a variety of reasons, including vacant property. The number of such cases was not specified in the RAE report.

Interestingly, suppliers submitted a total of 310,333 requests to cease representing consumers in 2019. Of these, 280,962 were executed by the operator.

Suppliers made these representation-ending requests in response to delays by the operator to execute supply cut orders for unpaid bills. As a result, unreliable and unwanted consumers were transferred to the country’s universal supply service, offering higher-priced electricity supply as a last resort.

Universal supply service overcharge set at 12%

Electricity consumers resorting to the universal supply service, covering the energy needs of households and small businesses shunned by suppliers for failing to be punctual with payments, will face tariff levels 12 percent over the regular market rate, according to a related ministerial decision.

The country’s five biggest electricity suppliers, in terms of retail market share, will need to share the pool of old and new unwanted customers and provide the universal supply service.

Previously, the market leader – consistently PPC – was forced to offer the service alone after suppliers chose not to submit bids to related universal service tenders.

Under the service’s new rules, the highest tariff rate among the top five suppliers will serve as the base for the 12 percent overcharge.

PPC, still dominating Greece’s retail electricity market with a 90 percent share of power meters, Protergia (Mytilineos), Heron, Elpedison – all three control 3 percent each – and NRG (1%) are the top five suppliers who, by law, must offer the universal supply service.

 

 

Top five taking on universal supply service, tender futile

A tender staged by RAE, the Regulatory Authority for Energy, offering electricity suppliers a two-year contract for universal supply service covering the needs of consumers who have been shunned for not being punctual with payments, has failed to produce a result.

Though the outcome of this procedure remains consistent with results of equivalent tenders in previous years, an imminent change of rules will require the electricity market’s top five suppliers, based on market share, to assume the universal supply service.  Higher tariffs are charged.

Until now, power utility PPC, as market leader, was forced to take on the job alone.

A ministerial decision on the rule change is expected to be delivered by deputy energy minister Gerassimos Thomas within the next few days.

The universal electricity supply service’s two-year contract starts on June 23.

Based on market data for April, the Greek retail electricity market’s top five suppliers are: PPC, Protergia, Heron, Elpedison and Watt+Volt. NRG trails slightly behind in sixth place.

Unlike other European markets, where the universal electricity supply service is a desirable venture, and, as a result, warrants competitive procedures, the equivalent service in Greece is typically neglected by suppliers as it has been abused by non-punctual electricity consumers exploiting the service as a safe haven.

Sidelined consumers using universal electricity supply up 511%

The number of users of a universal electricity supply service introduced almost a decade ago to cover the electricity needs of consumers shunned by suppliers for repeatedly failing to meet electricity bill payments increased by over 500 percent between late 2017 and the end of 2019, a RAE (Regulatory Authority for Energy) report commissioned by the energy ministry has shown.

The total number of the universal electricity supply service’s users grew from 22,127 in December, 2017 to 34,591 a year later, a 56 percent increase, before surging to 135,278 in December, 2019, a 511 percent increase.

The number of domestic users of the universal electricity supply service increased by approximately 38 percent between June, 2018 and June, 2019, rising from 20,423 users 28,252.

Non-household consumers using the service increased by roughly 16 percent during the aforementioned period, from 12,447 to 14,468.

Unpaid receivables by consumers using the universal electricity supply service, offered to sidelined customers at elevated tariffs, surged 511 percent between 2013 and 2016, from 5.6 million euros to 36.9 million euros, the RAE report showed.

Tougher terms are being prepared for the universal electricity supply service. RAE has proposed a three-month limit. No specific limit has existed until now. This has been exploited by a considerable number of electricity bill dodgers, or consumers deemed capable, even affluent, but unwilling to service accumulating electricity bills.

Natural gas market to also get universal supply service

The energy ministry plans to soon introduce a universal supply service for Greece’s natural gas market, guaranteeing troubled consumers a supplier, at a higher cost, should they be rejected by their regular supplier for not paying energy bills.

Authorities want to introduce a universal supply service for the natural gas sector as a result of the increased number of natural gas consumers.

A universal supply service is already offered for the electricity market’s low-voltage category, but tougher terms are soon expected to be introduced as a growing number of consumers have exploited its loose terms, including no time limit, and kept ignoring electricity bills. Authorities are now considering imposing a time limit of between two and three months.

Approximately 135,000 electricity consumers deemed financially capable of meeting the cost of their energy bills are believed to be exploiting the universal supply service at present.

Under the universal supply service’s new terms, energy supply will be swiftly disrupted if electricity or gas consumers fail to pay bills.

The correction by authorities is expected to make the universal supply service a more appealing prospect for electricity suppliers and intensify bidding at related tenders staged by RAE, the Regulatory Authority for Energy, for the service.

Should tenders fail to attract a supplier, then the five biggest suppliers will need to step in and provide the service.

RAE proposes tougher terms for universal supply service

The board at RAE, the Regulatory Authority for Energy, has decided on tougher terms for a universal electricity supply service introduced almost a decade ago to cover the electricity needs of consumers shunned by suppliers for repeatedly failing to meet electricity bill payments.

The authority, whose decisions are to be forwarded to the energy ministry in an advisory report, wants a three-month limit imposed on the universal service. No specific limit has existed until now. This has been exploited by a considerable number of electricity bill dodgers, or consumers deemed capable, even affluent, but unwilling to service accumulating electricity bills.

Under the RAE recommendation, consumers using the universal service will need to find a supplier once their three-month period has expired. Also universal service bills will need to have been settled prior to any move, according to the authority’s proposal.

RAE, in a second decision, has proposed that the market’s top five electricity suppliers – based on financial standing or market share – jointly provide the universal service if a competitive procedure fails to produce a winning bidder.

Until now, PPC has been required by law, as the dominant player, to provide this universal service because independent suppliers have been unwilling to do so.

Consumers are charged higher tariff rates for resorting to the universal service. At present, universal service tariffs are about 12 percent higher than regular tariffs.

Shorter time limit, higher rates seen for universal supply

RAE, the Regulatory Authority for Energy, and the energy ministry are working on stricter regulations for a universal electricity supply service introduced almost a decade ago to cover the electricity needs of blacklisted consumers shunned by suppliers for repeatedly failing to meet electricity bill payments.

The number of users of this universal service is estimated to have risen to 135,000. This figure is believed to include a considerable number of electricity bill dodgers, or consumers deemed capable, even affluent, but unwilling to service accumulating electricity bills.

The energy ministry is awaiting the findings of a RAE report before it takes any decisions to revise the service’s current rules, sources informed.

The introduction of a time limit, possibly three months, is one of the measures being considered, sources noted.

A tariff increase per KWh for this universal service, currently 12 percent higher than market rates, is another measure being looked at by authorities, according to sources.

Recent legislation aiming to reshape power utility PPC includes a law requiring suppliers to alternate in providing this universal service to blacklisted consumers if related competitive procedures do not produce a result.

Until now, PPC has been required by law, as the dominant player, to provide this universal service because independent suppliers have been unwilling to do so.

 

Stricter PPC hiring supervision among energy draft bill changes

A number of observations made during public consultation for an energy-sector draft bill concerning the energy market’s liberalization, power utility PPC’s modernization, gas utility DEPA’s privatization and RES support, including stricter recruitment control at PPC, have been incorporated into the bill.

The draft bill, submitted to Parliament last Friday, will now be distributed to parliamentary committees for discussion before being transferred to the house for ratification towards the end of the month.

The stricter recruitment control at state-controlled PPC will require inspections and approvals by ASEP, the Supreme Council for Civil Personnel Selection, during hiring procedures, not afterwards.

In another important draft bill revision, gas utility DEPA’s possible stake in the prospective Alexandroupoli FSRU would be held by DEPA Trade, a new DEPA entity being formed as part of the gas utility’s privatization. Previously, this stake was planned for the utility’s international projects division.

Furthermore, the new shareholders to acquire the Greek State’s 65 percent of DEPA Infrastructure, the gas utility’s other new entity in the making, will need to maintain this stake for at least five years.

Also, a universal electricity supply service covering the electricity needs of blacklisted consumers not wanted by suppliers for repeatedly failing to meet electricity bill payments, will require the market’s top five suppliers – up from three – to cover this sector’s market needs for two years if a competitive procedure for the service fails to produce a result.

Independent suppliers, repelled by market irregularities, have shunned this universal service since its introduction in Greece in 2011. This has forced PPC to step in, by law, as the dominant player.

The aim is to transform the universal service, offering electricity at considerably elevated rates, into an attractive market for local suppliers, as is the case in other European markets.

Tougher universal supply rules will aim to clear out abusers

The energy ministry is preparing drastic action over the next few months intended to shape up a universal electricity supply service introduced in 2011 as refuge covering the electricity needs of blacklisted consumers not wanted by suppliers for repeatedly failing to meet electricity bill payments.

Over the years, this service – now covering the power needs of approximately 150,000 small-scale consumers, mostly low-voltage households – has deteriorated into a getaway for electricity bill dodgers, or consumers deemed capable, even affluent, but unwilling to service accumulating electricity bills.

The service is provided by a supplier theoretically chosen through a competitive procedure. However, all independent suppliers, fearing the system’s widespread abuse, have shunned the process. As a result, the service must, by law, be provided by the dominant player – PPC, at present.

Rules concerning this universal service will be tightened to clear out the abuse, energy ministry sources informed. Also, DEDDIE/HEDNO, the Hellenic Electricity Distribution Network Operator, will be ordered to proceed with swifter electricity cuts for consumers exploiting the system.

Consumers either refusing to pay electricity bill arrears at regular suppliers or not servicing payback installment will be barred entry into the universal service, sources noted.

If the problems are resolved, the universal service, offering electricity at considerably elevated rates, will be transformed into an attractive market for local suppliers, as is the case in all other European markets.

 

Independent producers group opposes universal service role

ESAI/HAIPP, the Hellenic Association of Independent Power Producers, has raised objections to an energy ministry legislative proposal whose ratification would require the country’s three biggest independent suppliers to share the responsibility of a universal service supplying electricity to blacklisted electricity consumers who can no longer find a supplier as a result of poor payment records at previous companies.

Under the existing regulations, the state-controlled power utility PPC, as the dominant player, is providing this universal electricity supply service to sidelined consumers.

The objective of any revisions should be to correct distortions caused by existing regulations and the way these are implemented by the network operator, a PPC subsidiary, rather than to relay the problem to far smaller competitors, the association pointed out.

The bigger independent suppliers, each currently serving between 150,000 and 200,000 customers, compared to PPC’s far bigger client base numbering 6.5 million to seven million, would be placed under considerable pressure if required to take on this universal electricity supply role, ESAI/HAIPP noted.

Under current rules, the supplier covering this universal service’s needs is theoretically chosen through a competitive procedure. However, all independent suppliers have shunned the process. As a result, the service must, by law, be provided by the dominant player – PPC, at present.

The energy ministry’s draft bill would require the country’s three biggest independent suppliers to share this universal service responsibility if bidders refuse to show up for the competitive procedure.

Black-listed power consumers finding refuge in universal supply service

Thousands of black-listed electricity consumers no longer able to find a supplier as a result of poor payment records at previous companies are finding refuge through a universal supply service that was introduced in 2011 to cover the power needs of sidelined household and small businesses requiring capacities of up to 25 kVA.

Consumers no longer making the grade for supplier representation are legally entitled to apply for supply through this universal service, offering tariffs at elevated rates. RAE, the Regulatory Authority for Energy, most recently revised this rate to be 12 percent higher than tariffs offered by the power utility PPC.

The supplier covering this universal service’s electricity needs is theoretically chosen through a competitive procedure. However, all independent suppliers have shunned the process. As a result, the service must, by law, be provided by the dominant player – PPC, at present.

A draft bill prepared by the energy ministry and set to be presented for public consultation will include terms obligating the country’s three biggest independent suppliers to share this universal service responsibility if bidders refuse to show up for the competitive procedure, the ministry has noted.

Some 110,000 household consumers and small-scale businesses are estimated to be utilizing the universal service at present. PPC has been hardest hit in terms of the number of customers with arrears that have managed to flee.

A series of electricity market distortions have turned this service into a hideout for electricity consumers with poor payment records. These include consumers rated as able, even affluent, but unwilling to cover their electricity bill obligations. No time limits are imposed meaning the service can be enjoyed indefinitely.

According to PPC officials, the utility is identifying older debt-ridden customers of its own now using the universal service but cannot push for settlement of older debt as the service is regarded as a different entity by law.