Electricity suppliers: Worried about running out of cash in August

Power vendors, who have seen their position further deteriorate starting August, are facing economically tight conditions.

Providers, as executives told OT, because of the method used to grant state subsidies to their customers, are faced, every month, with demands of up to tens of millions of euros in working capital. Electricity suppliers first pay the subsidies that the state must give to consumers themselves and then, a month later, they collect the money they disbursed from the Energy Transition Fund.

This process has narrowed their liquidity, while at the same time, according to what market players describe, customers’ outstanding bills are rising. Households and businesses are either unable to meet their obligations due to high electricity prices or fail to keep the arrangements they had agreed upon in the past.

August will be “hot and bothered”

Electricity providers, and especially those that do not belong to a group that is also active in electricity production, see their financial position more difficult come August.

As they explained to OT, given that the Greek natural gas market prices come with a one-month delay, the big increases in July will be seen in August. Despite the fact that August may show signs of normalizing TTF prices if the Nord Stream 1 pipeline, which is supposedly undergoing maintenance, finally goes back online by July 21.

Thus, providers, with the practice of late gas pricing, will be required to allocate more funds to provide the subsidies to their customers. Money which the Energy Transition Fund will return to them at the beginning of September in the best of cases. It should be noted here that the government already gave 300 million euros more for July than June for power bill subsidies. So with estimates for August retail electricity prices exceeding 0.50 euros per kilowatt hour, as against 0.35 euros, subsidy funding will be much higher than July’s 722 million euros.

Adding to the concerns of the suppliers is the possibility of a further delay in the payment by the Energy Transition Fund of the subsidy amounts to the suppliers since in August, as market officials say, the Renewable Energy Sources Operator & Guarantees of Origin (DAPEEP SA) which is responsible for the clearing of the amounts could under-perform due to the small number of staff and summer holidays.

Proposals

The Hellenic Association of Energy Suppliers (ESPEN) recently, in a letter to the government, requested that at least 75% of the estimated amount of electricity and natural gas subsidies be paid in advance to the companies for each month of implementation of the measure, or that the settlement of the subsidized amounts be done on a weekly basis.

In addition, in view of the submission of the amendment by the Ministry of Environment and Energy to change the date (on July 25) of posting electricity supply prices for August, ESPEN requests that the time of forecasting the tariffs be modified as well. That is, providers should not post the prices that will be charged to their customers two months later, but for the following month. In this way, as they explain, the risk assumed by providers for price forecasts is reduced, and so is the need to commit huge sums for subsidizing electricity bills.