Favorable farming power-bill terms good news for PPC

A government plan offering farmers extremely favorable terms for long-term, installment-based settlement of overdue amounts concerning electricity consumption comes as good news for the power utility PPC, owed an estimated 100 million euros by farmers.

As part of its effort to appease protesting farmers in Greece, the government is offering interest-free, installment-based settlement of overdue electricity-bill amounts over ten-year periods.

One in three farmers in Greece is behind on electricity-bill payments, while, in some areas, well over 50 percent of farmers are not meeting their energy-cost obligations.

In the Dodecanese Islands, 82 percent of farmers face overdue electricity bills, Grevena, in the country’s north, follows with 77 percent, the percentage in Drama, also north, is 67 percent, while 59 percent of farmers on the Ionian island of Corfu are not keeping up with electricity-bill payments.

Worse still, only 10 percent of farmers carrying energy debt are accepting installment-based, payback arrangements offered by PPC with terms that are far more favorable than those offered to consumers of other categories.

In addition, roughly half of the farmers who do accept these installment-based, payback arrangements offered by PPC end up defaulting after having serviced an average of four monthly installments.

These defaulters eventually end up reapplying for new installment-based, payback arrangements before defaulting again, transforming the process into an ordeal.

 

RAAEY working on new version of ‘energy tourism’ restrictions

Residential electricity consumers will be permitted to change as many as three suppliers without having previously settled older energy bills or made installment-based payback arrangements, while business consumers will be set a two-supplier limit, according to a latest third version of upcoming rules intended to prevent consumers from abandoning suppliers despite owing electricity-bill amounts, a phenomenon locally dubbed “energy tourism”.

These limits for residential and business consumers will be applied retroactively, beginning January 1, 2020.

The new rules will also include a debt-flagging system on a collective platform maintained by distribution network operator DEDDIE/HEDNO, so that suppliers may be aware if prospective customers have been on the run.

Also, punctual customers will, as a reward, face less red tape if wanting to switch electricity suppliers.

RAAEY, the Regulatory Authority for Waste, Energy and Water, is now working on the latest revisions to the plan, which, once completed, will be forwarded to the energy ministry for implementation.

 

Simpler supplier switching limited to punctual consumers

The energy ministry, preparing action to simplify the consumer-switching procedure from one electricity supplier to another by limiting bureaucracy as a means of boosting mobility and competition, intends to reserve this convenience for customers without arrears.

On the contrary, customers owing electricity-bill amounts will continue to face all existing bureaucracy should they wish to change supplier.

Limitations making transfers to other electricity suppliers difficult will apply to all consumers with arrears, not just those marked out on an upcoming and collective debt-flagging system for all suppliers to see.

The ministry needs to strike a right balance between freedom and constraint as too much leeway for consumers could prompt a further increase in the number of consumers abandoning suppliers despite owing electricity-bill amounts, a phenomenon locally dubbed “energy tourism”.

As part of the wider effort to boost mobility and competition, authorities have just launched a price-comparison chart listing new variable tariffs, dubbed green tariffs, offered by all suppliers as of January 1. These tariffs will be revised by all suppliers monthly, at the beginning of each month.  (https://invoices.rae.gr/oikiako/)

Ministry to limit red tape for consumers changing supplier

The energy ministry is seeking to simplify the procedure for consumer switches from one electricity supplier to another by limiting bureaucracy as a means of boosting mobility and competition.

The ministry is looking to reduce the amount of paperwork consumers are required to sign when entering into contract with suppliers, including authorizations, affidavits, as well as fine print added to contracts by legal offices representing suppliers.

Much work is needed as the effort is still at a preliminary stage. The ministry needs to tread carefully to prevent any side affects. It must strike a right balance between freedom and constraint as too much leeway for consumers could prompt a further increase in the number of consumers abandoning suppliers despite owing electricity-bill amounts, a phenomenon locally dubbed “energy tourism”.

To combat this trend, the ministry is preparing to introduce a debt-flagging system that would help protect suppliers against runaway consumers.

Looser electricity market rules implemented over the past couple of years have resulted in a sharp rise of unpaid receivables, up 500 million euros over the past year.

Under the new collective debt-flagging data system, consumers owing amounts to previous suppliers will be marked out for all suppliers to see.

 

Stricter switching, power theft rules headed for Parliament

The energy ministry plans to submit a draft bill of retail electricity market revisions to Parliament next week. The bill contains stricter rules aiming to prevent consumers with unpaid electricity bills from switching suppliers and counter electricity theft.

Consumers will not be able to move away from their electricity supplier if the supplier is the third power retailer at which they have accumulated overdue energy bills within a five-year period beginning January 1, 2020, according to the draft bill.

This obstacle will be combined with a debt-flagging system prepared by RAAEY, the Regulatory Authority for Waste, Energy and Water, energy minister Thodoris Skylakakis informed suppliers just days ago.

The retail electricity market revisions also include a single variable tariff formula that all electricity retailers will need to adopt and include in their tariff packages offered to customers as of January 1, 2024.

Speaking yesterday at the 27th National Energy Conference “Energy + Development”, an event organized by IENE, the Institute of Energy for Southeast Europe, the energy minister spoke of the very high cost to the system caused by electricity theft, estimating its cost at 400 million euros per year.

Rules against electricity thieves will become a lot stricter, while complicit electricians will have their professional licenses revoked, according to the new rules.

Suppliers want more flexible formula for new variable tariff

A new variable tariff formula that suppliers will need to adopt as a means of improving price-comparison clarity for consumers and stimulating competition will be launched as planned, January 1, when energy crisis measures will be withdrawn, ending subsidies for consumers, energy minister Thodoris Skylakakis confirmed at a meeting yesterday with top officials of ESPEN, the Greek Energy Suppliers Association.

The single variable tariff formula, which all suppliers will need to include in their overall package of tariff offers to consumers, is being introduced with a large proportion of consumers in mind and will allow price comparability of companies’ offers, promoting competition, the minister stressed.

Suppliers called for greater flexibility to the single variable tariff formula so that they could make monthly adjustments, based on prevailing wholesale electricity prices.

All pending retail electricity market issues were tabled during the meeting. These include planned reimbursements for electricity suppliers who have been forced to cover an estimated 800 million euros, overall, in subsidies offered by the state during the energy crisis as support for small and medium-sized enterprises; stricter market rules preventing consumers with unpaid bills from switching suppliers; as well as the imposition of a time limit, for users, on the country’s universal electricity supply service, offered as a last-resort solution by the top five suppliers, based on market share, to black-listed household and business consumers who have been shunned by suppliers over payment failures.

Power suppliers’ association holds crucial talks with ministry

ESPEN, the Greek Energy Suppliers Association, will push for swift government action that would finalize a series of pending electricity market measures at a meeting today with the energy ministry’s leadership.

The association, determined to reduce high unpaid receivables faced by electricity suppliers, is awaiting stricter user rules, including a time limit, for the country’s universal electricity supply service. It is offered as a last-resort solution by the country’s top five suppliers, based on market share, to black-listed household and business consumers who have been shunned by suppliers over payment failures.

ESPEN also wants the ministry to push through with plans designed to prevent consumers with unpaid electricity bills from switching suppliers without restriction.

The talks between the two sides will also include implementation details on the new retail electricity market rules, planned to come into effect January 1.

The revisions include the end of a freeze on indexation clauses, green tariffs, and a single variable tariff formula aiming to simplify price comparisons for consumers.

A legislative revision covering these revisions has been ratified in Greek Parliament, but a ministerial revision is still needed. It is expected to be delivered within the next few days, sources informed.

Electricity suppliers want clarity as they will need to inform customers of  upcoming market rule changes by December 1.

 

 

RAAEY plan tackling consumer switching set for consultation

A proposal prepared by RAAEY, the Regulatory Authority for Waste, Energy and Water, for revisions to Article 42 of the retail electricity market’s supply code as a means of countering supplier switches by debt-escaping consumers, while, at the same time, providing greater switching flexibility to punctual customers, is expected to be forwarded for consultation this week.

The adoption of a debt-flagging system as a collective data base identifying non-punctual customers for all suppliers to see is a key aspect of the new strategy. Unpaid receivables owed by roving consumers exploiting lax rules have risen to alarming levels.

The debt-flagging system will be color-based. Consumers with unsettled bills will appear highlighted in red in the system’s collective data base after have received a final warning on such action from their supplier, who, following this step, will be entitled to request supply cuts from the grid operator if overdue amounts remain unsettled or an installment-based payment schedules has not been established.

According to the RAAEY proposal, suppliers will maintain the right to redden former customers on the run for up to three months after they have fled to rival suppliers, but electricity-cut rights of suppliers against former customers will expire 12 months following their departures.

Electricity market measures to be announced next Wednesday

Energy minister Thodoris Skylakakis plans to announce, on November 1, details of imminent energy-cost measures intended to subdue retail electricity prices by intensifying competition through a single variable-tariff formula for all suppliers, who will remain free to set profit margins in accordance with their pricing policies, while also offering selective subsidy support to low-income households.

The single variable-tariff formula for all suppliers is also intended to offer consumers greater clarity by improving their price-comparing ability.

The ministry, expected to submit to parliament an amendment for the single variable-tariff formula any day now, believes its package of new measures, planned to be implemented January 1 in place of energy-crisis measures that included universal electricity subsidies and a freeze on indexation clauses, will help contain energy costs, despite the reactivation of indexation clauses and the widening Middle East conflict.

According to the plan, all electricity consumers will be automatically transferred to the new single variable tariff as of January 1, for 12 months, unless they opt, prior to this date, for any other supply deals offered by suppliers.

Electricity suppliers, convinced the single variable-tariff formula will not enable them to mitigate risk and also breach EU market rules, are already calling for changes to the plan.

In response, the ministry has noted suppliers will be free to set profit margin levels as they please. It has also pointed to a recent EU report highlighting the need for greater transparency in the Greek energy market.

Next Wednesday’s announcements by the energy minister will also include details on a new debt-flagging system designed to contain the high level of unpaid receivables in the country’s electricity market. The minister’s package of measures is also expected to contain an action plan addressing electricity theft.

1.6m customers owe €1.2bn in low-voltage electricity bills

Electricity suppliers are burdened by 1.2 billion euros in unpaid receivables owed by 1.6 million active household and business customers on their customer lists.

Under existing market rules, consumers with unsettled electricity bills remain free to switch suppliers, making legal discourse, a costly and time consuming option, the only option available to suppliers seeking to recover unpaid energy-bill amounts from customers who have fled to rival suppliers.

Energy tourism, as the phenomenon has been dubbed locally, has played a big role in the accumulation of unpaid receivables, and, worse still, bad debt estimated at 1.64 billion euros and accumulated by 1.3 former customers.

The energy ministry is preparing tougher rules, including the introduction of a debt-flagging system, to restrict consumers from switching suppliers if they owe amounts.

According to data provided by RAAEY, the Regulatory Authority for Waste, Energy and Water, an average of 21.5 percent of consumers – from the pool of suppliers –  owe electricity bill amounts to their respective suppliers.

A 20.83 percent share of power utility PPC’s low-voltage customers currently face overdue electricity bills. The percentage of debt-owing customers is even higher for independent suppliers, at 23.66 percent, or 445,000 of 1.88 million customers.

In the medium-voltage category, 10.66 percent of PPC’s 9,600 customers face overdue electricity bills, compared to 20.67 percent of 1,520 customers represented by independent suppliers.

In the high-voltage category, 23 of 210 consumers (10.95%) represented by PPC are behind on their electricity bill payments, compared to 50 of 145 customers (34.25%) represented by independent suppliers.

 

‘Red status’ after two unpaid bills for debt-flagging system

A debt-flagging system being prepared by the energy ministry for the retail electricity market as a means of countering roving consumers who switch suppliers and escape from unsettled electricity bills would relegate consumers with two successive unpaid bills into a red zone, entitling suppliers to take action by requesting power supply cuts from the operator, the ministry appears to have decided.

Energy minister Thodoris Skylakakis held a meeting yesterday with officials from RAAEY, the Regulatory Authority for Waste, Energy and Water, and distribution network operator DEDDIE/HEDNO to discuss details of the debt-flagging system.

Consumers in the red-zone category would only be allowed to switch suppliers if their existing supplier refrains from disrupting their power supply.

Also, consumers would be removed from the red-zone category if they settle overdue amounts or begin servicing them through installment-based payback plans, according to the ministry’s plan.

The ministry is striving to finalize the plan’s shape as soon as possible as it aims to present it within October.

Over 30,000 consumers are believed to owe electricity-bill amounts to more than one supplier, according to ministry estimates.

Unpaid receivables, market officials estimate, have ballooned to approximately one billion euros. The sum has risen sharply since July, 2022, when consumers were given the freedom to switch suppliers even if owing amounts to previous suppliers.

Debt-flagging system needs more work, ministry decides

A debt-flagging system being prepared by the energy ministry for the retail electricity market as a means of countering roving consumers who switch suppliers and escape from unsettled electricity bills requires further development, the ministry has decided.

Details still needed to finalize the plan, part of wider revisions to the supply code, will be discussed at an energy ministry meeting on Thursday to involve representatives of RAAEY, the Regulatory Authority for Waste, Energy and Water, and distribution network operator DEDDIE/HEDNO, to manage the debt-flagging system.

DEDDIE/HEDNO has requested a limit to its responsibility for the system as the operator will have no way of cross-examining the validity of data posted by suppliers. This is one of the draft’s needed improvements that will be discussed at Thursday’s meeting.

The aim is to establish clear-cut rules on customer switching in order to protect suppliers, hit by a sharp rise in bad debt. Customer credibility will be signified through a color-based ranking system.

An additional meeting could be required next week. The energy ministry wants all revisions finalized within the next couple of weeks so that it can present an upgraded supply code before the end of October.

Debt-flagging system for electricity market ‘imminent’

A debt-flagging system to be made available to electricity suppliers as part of an effort to counter serial electricity-bill defaulters could be ready imminently, within the next month or two, officials at distribution network operator DEDDIE/HEDNO and RAAEY, the Regulatory Authority for Waste, Energy and Water, agreed during a meeting on Wednesday that included electricity supplier representatives as observers.

RAAEY presented a comprehensive plan for the development of a debt-flagging system, which DEDDIE/HEDNO officials ascertained could be ready for launch one to two months from now, sources informed.

However, DEDDIE/HEDNO clarified that it cannot take any responsibility for data to be posted on the debt-flagging system as it has no way of verifying its validity, the sources added.

As this data will be provided by electricity suppliers, establishing a transparent formula is crucial to ensure the operator will not be held accountable in the event that a consumer is erroneously marked as delinquent in the system due to a supplier’s mistake, and, as a result, suffers unjust repercussions without actually having outstanding debts.

Electricity suppliers are facing a surge in bad debts resulting from customers who opt to switch companies and leave behind unpaid bills, while just one in ten non-punctual consumers who have been blacklisted by suppliers and subsequently resorted to the country’s universal electricity supply service – offered, by law, by the top five suppliers – are paying fees for this service.

Electricity debt-flagging details discussed by officials today

The technical details and preparation time for a prospective debt-flagging system to be made available to electricity suppliers as part of an effort to counter strategic electricity bill evaders will be discussed at a meeting today between RAAEY, the Regulatory Authority for Waste, Energy, and officials of distribution network operator DEDDIE/HEDNO, to manage the new system.

Representatives of independent suppliers and power utility PPC are anticipated to take part in today’s meeting, serving as a follow-up to a broader industry-wide discussion regarding electricity bill evasion that took place last week.

It was decided, during last week’s meeting, that RAAEY would provide  the energy ministry, by October 20, with a proposal for a revision to Article 42 of the supply code in the electricity market. This revision will aim to prevent strategic defaulters who owe unsettled amounts from switching to new electricity suppliers without addressing their outstanding bills.

RAAEY will use, as a template, a preceding plan it had prepared and delivered to the energy ministry in the spring of 2021, following three rounds of consultation.

ESPEN, the Greek Energy Suppliers Association, plans, this week, to submit to RAAEY a proposal seeking to allow electricity suppliers to discontinue supply to customers who have two overdue electricity bills, energypress sources informed.

Action to tackle electricity bill evasion, theft, costing plenty

The energy ministry appears determined to deal with the wider cost and market repercussions caused by strategic electricity bill evaders and electricity theft as it prepares a plan aimed at keeping electricity price levels under control once universal subsidy support for consumers is lifted at the end of the year and indexation clauses are reintroduced by suppliers.

Energy minister Thodoris Skylakakis, a former deputy at the finance ministry, knows well that electricity bill evasion can be likened to tax evasion, as consumers who manage to avoid paying electricity bills, by taking advantage of lax domestic regulations to switch suppliers and leave behind unsettled bills, are ultimately doing so at the cost of punctual consumers, who end up shouldering consequent costs.

Even if a fraction of unpaid receivables owed to electricity suppliers were to be covered, this would help suppliers subdue their tariff levels, market officials pointed out.

Taking all this in mind, the energy ministry is expected to announce tough measures in October, clamping down on serial electricity bill evaders as well as electricity thieves.

Meanwhile, the ministry will also seek to offer reinforced energy-cost support to low-income households as of 2024, when universal energy-crisis aid, in the form of subsidies, will cease to exist and indexation clauses are reactivated by suppliers. Income levels and geographical location are expected to be factored into calculations for support to eligible households.

The ministry’s action plan countering electricity bill evaders, estimated at 30,000, will involve implementing a debt-flagging system similar to one used in the banking sector.

Electricity theft, the other key front that needs to be addressed, cost consumers a total of 789 million euros in 2022, according to recent data.

RAAEY proposal tackling ‘energy tourism’ in a month’s time

RAAEY, the Regulatory Authority for Waste, Energy and Water, commissioned by the energy ministry to prepare a proposal for revisions to the electricity market’s supply code as a means of countering a surge in bad debt faced by electricity suppliers as a result of roving customers who are switching suppliers and escaping from unsettled electricity bills, will put forward its plan for a five-day consultation period, October 9 to 13, before finalizing its text and forwarding a completed version to the ministry by October 20.

This schedule was established at a RAAEY meeting yesterday with energy ministry officials and representatives of the country’s electricity suppliers.

RAAEY will use, as a template, a preceding plan it had prepared and delivered to the energy ministry in the spring of 2021, following three rounds of consultation.

At yesterday’s meeting, electricity supplier representatives raised objections to certain aspects of the existing plan and, it was agreed, will deliver proposed amendments by the beginning of next week. These concerns will be taken into consideration by RAAEY before it finalizes its proposal for the energy ministry.

Power utility PPC and independent suppliers are expected to forward their concerns through ESPEN, the Greek Energy Suppliers Association.

Revisions to the electricity market’s Article 42 of the supply code, which would stop strategic defaulters from fleeing to new electricity suppliers, will include a debt-flagging system, a key part of the previous proposals. This system will be managed by distribution network operator DEDDIE/HEDNO.

Under current market rules, consumers with unpaid electricity bills remain free to switch suppliers. Resulting bad debt is estimated to have reached at least 300 million euros and may have even exceed 400 million euros.

Officials meet on revisions addressing ‘energy tourism’

The energy ministry, preparing action to combat a surge in bad debt faced by electricity suppliers as a result of roving customers who are switching suppliers and escaping from unsettled electricity bills, has commissioned RAAEY, the Regulatory Authority for Waste, Energy and Water, to prepare a relevant study leading to revisions.

RAAEY plans to host a meeting today with energy ministry officials and representatives of all the country’s electricity suppliers ahead of the planned revisions.

The ministry intends to revise Article 42 of the Supply Code, which would stop strategic defaulters from fleeing to new suppliers if they have not covered outstanding energy bills.

Under current market rules, consumers with unpaid electricity bills remain free to switch suppliers. Resulting bad debt is estimated to have reached at least 300 million euros and may have even exceed 400 million euros.

Bad debt recorded by electricity suppliers has risen to 3 percent of their revenues, up from 1 percent not too long ago.

Also, financial losses resulting from the failure of most consumers to pay for a universal electricity supply service offered, by law, to blacklisted customers by the top five suppliers, based on market share, is distorting the market. The service’s participating suppliers are consequently forced to pass on losses incurred to punctual customers, market officials have noted.

The ministry is planning revisions for both Article 42 of the Supply Code and the universal electricity supply service.

Energy company NRG’s general manager Anastasios Lostarakos recently highlighted the need for action, in the form of legislative revisions, to tackle irregularities, significantly burdening suppliers. The longer the issue remains unaddressed, the deeper the financial hole for suppliers, he noted.

 

Suppliers face bad-debt surge created by roving customers

Electricity suppliers are facing a surge in bad debts resulting from customers who opt to switch companies and leave behind unpaid bills, while just one in ten non-punctual consumers who have been blacklisted by suppliers and subsequently resorted to the country’s universal electricity supply service – offered, by law, by the top five suppliers – are paying fees for this service.

Energy company NRG’s general manager Anastasios Lostarakos, speaking to journalists at the Thessaloniki International Fair, highlighted these concerns and stressed the need for action, in the form of legislative revisions, to tackle irregularities, significantly burdening suppliers.

Article 42 of the country’s Supply Code requires immediate amendment so that suppliers may be protected from customers switching suppliers, despite facing unpaid electricity bills, Lostarakos noted. The longer the issue remains unaddressed, the deeper the financial hole for suppliers, he added.

Bad debt recorded by electricity suppliers has risen to 3 percent of revenue, up from 1 percent not too long ago, the NRG official highlighted. Also, financial losses resulting from the failure of nine in ten consumers to pay for the universal electricity supply service end up being passed on, by the participating suppliers, to punctual customers, the NRG official noted.

Electricity suppliers call for supply code overhaul

Electricity retailers share the same view as RAAEY, the Regulatory Authority for Energy, Environment, and Water, and the energy ministry in wanting the country’s new supply code to be revamped into a modern framework for the energy sector rather than a mere update of the existing set of rules, a teleconference between the authority and suppliers has highlighted.

Suppliers called for changes to most articles of the country’s current supply code. The teleconference was held as RAAEY is currently preparing a related proposal for the energy ministry. According to a related ministerial decision, the new supply code needs to be implemented by the end of the year.

RAAEY’s proposal will need to be ready for consultation by the end of November, according to market officials.

Given this time frame, RAAEY will need to get to work on revisions to the existing supply code within the next few days.

A common grievance voiced by electricity suppliers during yesterday’s teleconference included the absence of regulations that prevent consumers with outstanding electricity bills from switching to different suppliers.

The ease with which blacklisted household and business consumers who have been shunned by electricity suppliers over payment failures can resort to the country’s universal electricity supply service, provided – by law – by the electricity market’s top five suppliers, was another concern highlighted by power suppliers.

The extent of revisions needed to the supply code means that it could need to be rewritten from scratch.

Given the demands of such an overhaul, some suppliers have proposed that the effort be carried out over two stages, with priority given to more crucial matters, so that they may be implemented by the end of the year.

Ministry planning 4-month limit on universal supply service

The energy ministry plans to impose a four-month limit on the use of the country’s universal electricity supply service by black-listed household and business consumers who have been shunned by suppliers over payment failures.

The ministry has already forwarded a draft of its plan to all electricity suppliers for comments, by the end of this week, following a short extension, before it finalizes the revised service rules.

At present, black-listed consumers no longer accepted by electricity suppliers can rely on the universal electricity supply service for unlimited periods.

Provided collectively – by law – by the electricity market’s top five suppliers, based on market share, the universal electricity supply service has grown to become a key supplier.

According to most recent related data provided by RAAEY, the the Regulatory Authority for Energy, Environment, and Water, the universal electricity supply service served 210,415 power meters in May. This is nearly ten times over the total of roughly 22,500 power meters served a decade ago.

Ministry preparing debt-flagging data system for 2024

Recently appointed energy minister Theodoros Skylakakis expects to have a detailed draft for a debt-flagging data system covering the energy market by September, the official has reiterated in comments to local media over the past fortnight.

The prospective debt-flagging data system, a topic discussed for years by market officials as a solution to the accumulation of unpaid receivables burdening energy suppliers, would detail energy-bill payment records of consumers for all market players to see.

Once introduced, the debt-flagging data system, to be fashioned in the style of an equivalent system used by the banking sector, would enable energy suppliers to check consumer payment records before they sign up new customers.

Following years of hesitation, rival electricity suppliers now appear far more willing to cooperate on the implementation of a debt-flagging data system as all have been victims of runaway consumers exploiting loopholes to switch suppliers despite owing previous energy-bill amounts.

The local retail energy market’s unpaid receivables, including amounts that have gone down as bad debt, have ballooned to exceed one billion euros.

It remains unclear if the energy market’s debt-flagging data system will be launched this year or next, but the latter appears most probable as work is still required to finalize the plan.

One thing for certain, the energy market’s rules will change. Current rules do not restrict consumers from switching suppliers, even if they are behind on energy bill payments to existing suppliers.

The problem worsened for suppliers approximately a year ago, when the government, as part of a package of energy crisis measures, included a rule amendment permitting consumers to switch suppliers without incurring penalties for premature withdrawals from contracts.

Ministry planning two-pronged attack on strategic non-payers

The energy ministry is preparing a two-pronged attack to counter electricity users deemed as capable but unwilling to pay their power bills, who, as a consequence, have made it a habit to switch suppliers while leaving behind unpaid amounts.

The ministry, according to sources, is preparing a debt-flagging data system whose consumer payment records will be available for all electricity suppliers to see before they sign up new customers.

As a second measure, the ministry plans to cross-examine, through finance ministry data, the financial standings of consumers behind on electricity bill payments. If these consumers are deemed to be high-income earners or owners of sizeable asset portfolios, they will face legal consequences.

Speaking yesterday on local radio SKAI, recently appointed energy minister Theodoros Skylakakis noted: “The fact that the State always has to take care of electricity [prices] does not mean that it does so in the same way for everyone. Someone, for example, with savings of 100,000 euro cannot be treated as vulnerable to energy prices, or in the same way as someone with 200 euros in savings.”

The country’s electricity suppliers have been burdened with an estimated 500 million euros in bad debt over the past year, alone, as a result of the actions of strategic non-payers.

Their ability to avoid payments was greatly assisted by a decision issued by the Council of State, Greece’s supreme administrative court, in 2016. The court annulled a market rule requiring consumers to settle outstanding amounts owed to suppliers before switching.

Strategic non-payers were further assisted approximately a year ago when the government, as part of a package of energy crisis measures, included a revision permitting consumers to switch suppliers without incurring penalties for premature withdrawals from contracts.

RAAEY, the Regulatory Authority for Waste, Energy and Water, in a recent proposal forwarded to the energy ministry, has suggested it establish a law that would permit electricity retailers to order supply cuts for former customers with a certain number of unpaid electricity bills.

 

 

 

 

Low-income household, non-payer measures in the making

The government plans to soon announce new electricity market measures addressing two extremes, low-income households requiring support and strategic non-payers fleeing from their obligations.

Prime Minister Kyriakos Mitsotakis, who discussed measures concerning both issues during a recent meeting at the energy ministry, is expected to announce new measures at September’s Thessaloniki International Fair.

Low-income households are expected to be offered further protection against high energy costs, while strategic non-payers exploiting market rule loopholes to switch suppliers despite owing amounts to previous suppliers will face tougher rules.

The support measures for low-income households will include energy-cost relief for large families, while the government’s toughened stance against strategic non-payers will include rewards for punctual payers.

The country’s electricity suppliers have been burdened with an estimated 500 million euros in bad debt over the past year, alone, as a result of the actions of strategic non-payers.

Their ability to avoid payments was greatly assisted by a decision issued by the Council of State, Greece’s supreme administrative court, in 2016. The court annulled a market rule requiring consumers to settle outstanding amounts owed to suppliers before switching.

The pursuits of strategic non-payers were further assisted approximately a year ago when the government, in its package of energy crisis measures, included a revision permitting consumers to switch suppliers without incurring penalties for premature withdrawals from contracts.

New minister aims to clamp down on supply switchers with debt

Electricity market rules will be revised to stop consumers from manipulating legal inadequacies in order to avoid servicing bills, the reelected conservative New Democracy party government’s newly appointed energy minister Theodoros Skylakakis has indicated in his policy statement, presented during a three-day parliamentary debate.

A considerable number of low-voltage energy consumers are capitalizing on the liberty offered by an existing rule that enables them to switch to other suppliers without having settled previous power bills.

Unpaid receivables are estimated to have ballooned to approximately 500 million euros during the energy crisis.

Three years ago, the Council of State, Greece’s supreme administrative court, cancelled a ministerial decision that forbade energy users from switching to other suppliers if they had not settled previous electricity bills, either through full payment or commitment to installments.

In addition, penalties for consumers switching suppliers prematurely, before the expiration of supply agreements, were abolished last year.

These developments have prevented suppliers from being able to order supply cuts, through the market operator, for departing consumers leaving behind unsettled power bills.

RAAEY, the Regulatory Authority for Waste, Energy and Water, had put through consultation, three years ago, a debt-flagging proposal that was not adopted. Under that plan, consumers failing to meet extended, follow-up deadlines for unpaid electricity bills would have been subject to supply cuts and stopped from switching suppliers.

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

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.

 

Electricity suppliers raise range of concerns, call for action

Electricity users shifting suppliers and leaving behind accumulating unpaid bills, a growing reliance, by supplier-blacklisted consumers, on the country’s universal electricity supply service, as well as electricity bill surcharges suppliers are required to forward to the state, regardless of whether customers have paid their energy bills or not, are some of the key problems distorting the electricity market and resulting in cash-flow problems, suppliers have noted, calling for immediate state intervention.

Current market rules concerning customer shifts from one supplier to another lack restrictions and, as a result, have encouraged a growing number of non-punctual customers to flee and leave behind unpaid bills, which have reached perilous levels and usually develop into bad debt, energy firm representatives participating at the recent Power & Gas Forum in Athens highlighted.

Another issue troubling the sector is the government’s electricity subsidy support policy for businesses using up to 35 kVA and bakeries. Suppliers are temporarily covering these subsidies but extreme delays concerning state reimbursements are being reported. These sums add up to hundreds of millions of euros for the sector, severely impacting cash flow.

Current price-setting rules in the retail electricity market, requiring suppliers to announce their tariffs for each forthcoming month by the 20th of every preceding month, are also troubling market players, as Panos Nikou, CEO at energy retailer Volterra, told the Power & Gas Forum. “We can’t just gamble on the 20th of each month,” Nikou remarked, describing the price-setting rules as high-risk and often loss-incurring for suppliers.

Unpaid power bills rise in absence of consumer supplier switch restrictions

Electricity retailers are facing a growing amount of overdue electricity bills, prompted by higher energy prices and the absence of market rules that could prevent consumers with energy bill arrears from switching suppliers.

Suppliers lost the right to order power supply cuts for customers switching suppliers and leaving behind unpaid amounts following a decision delivered by the Council of State, Greece’s Supreme Administrative Court, approximately two years ago.

Higher energy prices have made it increasingly difficult for households and businesses to keep up with their energy bill payments, suppliers have noted, adding they are offering installment-based payment options in an effort to minimize unpaid receivables.

Since the supreme court’s decision two years ago, RAE, the Regulatory Authority for Energy, has proposed a framework offering protection to suppliers but the energy ministry has yet to take any legislative action. Next year is an election year in Greece.

In addition, last July, the ministry abolished a penalty for early withdrawals by customers from their agreements with electricity companies, the objective of this initiative being to pressure suppliers to lower their electricity price offers. Instead, it has enabled strategic defaulters to freely switch power suppliers, leaving behind unpaid amounts.

Suppliers want power cuts for roving consumers with arrears

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.

Time limit for universal electricity supply service

RAE, the Regulatory Authority for Energy, has, according to sources, received orders from the energy ministry to impose a time limit on the period consumers can rely on a universal electricity supply service, covering the needs of black-listed consumers reported by suppliers for electricity-bill payment failures.

At present, usage of the universal electricity supply service by consumers with outstanding electricity bills has no limit, but higher tariffs are charged for the service.

It is provided by the country’s five biggest electricity suppliers, in terms of retail market share, who share the pool of old and new unwanted customers and provide the universal supply service.

Recent market data showed an increasing trend in the number of households resorting to the universal electricity supply service.

RAE has proposed the establishment of a collective debt-flagging system, which would be maintained by distribution network operator DEDDIE/HEDNO, based on consumer appraisals provided by electricity retailers.

Consumers who continue to not pay electricity bills through the universal electricity supply service will face electricity supply cuts, under the proposed revision.

 

 

Suppliers’ cross-checking debt system within first half of 2023

Electricity suppliers are preparing a collective cross-checking debt system for consumers in an effort to prevent further increases in energy debt created by customers switching suppliers and leaving behind unpaid electricity bills.

These customers with arrears are managing to avoid power supply cuts at their properties despite not having settled energy bills with previous suppliers.

The cross-checking system to be applied in the energy sector will be similar to one adopted by the telecommunications sector. A data base will be created, listing consumers with arrears and their overdue energy-bill amounts.

Electricity suppliers involved in the new system’s development estimate that it is still months away from being completed and launched but believe it will be ready for use within the first half of 2023.

The process to establish this new platform is time-consuming as, besides the IT required, approval is also needed from agencies such as the personal data protection authority.

Some suppliers have reported that up to 40 percent of their unpaid receivables have been created by customers switching from one supplier to another.