Municipalities face “electrocution” due to debts to electricity suppliers

The energy crisis has caused a domino of debt.

The increase in electricity prices has triggered delays in the payment of debts from consumers to providers and they in turn are late in paying municipal fees and regulated charges.

The Ministry of Environment and Energy and the Energy Regulatory Authority are trying to slow down this debt spiral before it goes out of control and creates a new generation of overdue debts in the market.

One of the problems that municipalities face during the energy crisis is the delays in the payment of the fees they charge their citizens. The electricity supply companies, as it is known, collect them from the bills and then Hellenic Electricity Distribution Network Operator (HEDNO) clears the charges. According to information, there are providers who have been paying municipal fees for six and eight months. A period of time which has nothing to do with the outbreak of the energy crisis, or with the delay in the payment of electricity bills by households and businesses. According to market sources, it is obviously attributed to the poor financial situation of suppliers.

The energy crisis, however, has exacerbated the problem of arrears, leading to the accumulation of other debts.

Nebulous picture

Market pundits are talking about tens of millions of euros. Rough estimates speak of a total amount of 80 million euros.

The paradox is that there is no clear picture of the amount of fees that have been delayed in being paid to municipalities. Also, according to representatives of municipalities, there is no strictness before the time limit for the settlement of electricity bills.

This problem was discussed yesterday during a meeting at the energy ministry between minister Costas Skrekas, a municipality union (KEDE) delegation headed by the mayor of Trikala, Dimitris Papastergiou. According to information, the minister made it known to KEDE that the Energy Regulatory Authority has already been activated, requesting detailed information from HEDNO and the electricity suppliers.

The mayors asked the minister, according to the same information, to limit the time of clearing the accounts to two months. In addition, they request as a priority the payment of overdue fees that exceed a six or eight-month period. The domino of debts also burdens the obligations of the municipalities towards the Greek state. With the services of the latter in case of non-payment of invoices proceeding to withholding amounts intended for the payments of the municipalities.

Subsidies

Among the energy issues that KEDE discussed with the Energy Minister was the energy costs faced by the municipalities.

The electricity bills for municipal lighting but also for the operation of the water supply systems have caught fire… The president of the municipalities union asked the ministry for support measures.

According to information, the minister on his part, informed them that from January they are subsidized for municipal lighting and other uses with 65 euros per megawatt hour and the tariffs .

However, municipalities have been facing huge bills since last October, November and December, a trimester in which municipalities were not eligible for state aid.

Adjustable charges

The domino of debts, however, has also swept along the Managers of the energy market.

Debts of electricity suppliers that had risen to 350 million euros by October 2020 were settled last October 2021 and now according to information new debts have arisen.

These are regulated charges that consumers pay through their bills but providers do not reimburse to Administrators.

According to sources, tomorrow, Thursday, RAE has called the three Administrators in order to get a picture of the debts and then the providers will be addressed.