Electricity bills: Greek delinquent consumers blocked

The measures to deal with non-payers as well as the changes promoted by the Ministry of Environment and Energy in the retail electricity market from January 1, 2024 were discussed yesterday by private electricity suppliers in a meeting they had with the Minister of Environment and Energy Mr. Theodoros Skylakakis.

Delinquent consumers

In particular, consumers moving from provider to provider after amassing overdue debts was brought up for discussion, which is an issue that creates a “headache” for electricity suppliers.

According to what Mr. Skylakakis had announced at the beginning of November, consumers will not be allowed to change supplier for the fourth time, since he has already “broken” deals with two suppliers and has debts to a third one as well. In other words, consumers who have made a systematic change of at least two suppliers within five years and starting on January 1, 2020, without repaying or settling debts will not be able to change supplier, without repaying or settling debts to current (third party) suppliers.

However, the representatives of the supply companies pointed out to the minister that the solution proposed by the Regulatory Authority for Waste, Energy and Water (RAE) should also be adopted, according to which the right to submit a request to cut off the electricity to a non-paying consumer who leaves debts, must also apply for the previous electricity provider, as well as the current one, as long as the arrangement for repayment of old debts is not served.

For his part, Mr. Skylakakis assured them that both solutions, i.e. those of the RAE and the Ministry of the Interior, will be applied cumulatively to deal with energy “tourism” in the market, establishing the debt flagging system. This will be based on the proposal of the RAE, which provides for the marking by suppliers of overdue consumers in cases of overdue debts. The marking will be done on a special platform, to which the providers will have access, when there is a request to change the provider.

Objections to the new special “green” tariff

At the same time, within a few days the final decision will be “locked” with the details of the new special common electricity tariff (it will be marked green) to which, from January 1, 2024, those consumers who have not entered into an electricity supply contract will automatically switch. The new tariff will be adopted by a legislative regulation which will be voted in the coming days by the Plenary of the Parliament and its details will be specified by a Ministerial Decision.

During yesterday’s presentation by the political leadership of the Ministry of Internal Affairs, concerns and objections were expressed by electricity suppliers regarding specific details of the decision and in particular regarding the frequency of changing the coefficients included in the new clause (or otherwise the variation mechanism) which will include the new special tariffs.

The new tariffs

More specifically, in the new special tariffs, the suppliers will determine a fixed nominal price of the kilowatt hour, for a six-month period, based on a range of fluctuation of the wholesale price of electricity (Market Clearing Price – MCP or as it used to be called Marginal System Price – MSP) with more and lower limit.

If the wholesale price range set by the supplier is exceeded (i.e. when the wholesale price is less than the lower limit or more than the upper limit) then a variation mechanism (ie a new clause) will be triggered which will include a basic mark-up factor which will remain stable for one quarter. Also, the “equation” will also include a second coefficient which will be formed on the basis of the basic coefficient and will take into account the wholesale prices of the previous months (probably the previous two).

The objection of the electricity suppliers lies in the frequency of change of the coefficients of the mathematical formula of the clause, an issue that was not answered during the meeting with Mr. Skylakakis. Suppliers believe that if the six months for the fixed nominal kilowatt hour price and the three months for the rates apply it will limit the possibility of remedial action and competition, and therefore the ability to offer better prices to consumers. That is why they counter-propose that the rate changes can be made every month. In any case, suppliers should publish on their website the changes in rates and inform consumers about them with the first consumption bill following the modification.

Commercial consumers

Another issue that occupied yesterday’s meeting also concerned the issue of 35 KVA, i.e. the subsidies given by the suppliers to commercial consumers, which, however, they cannot collect from the Energy Transition Fund (ETF) if they do not have responsible declarations from consumers who state that they have not received any other type of European subsidy. The total amount of subsidies paid by energy providers, including PPC, is estimated at 800 million euros. But the specific amounts, due to the end of the special business support regime at the end of the year, are at risk of not being returned and being recorded as losses on the suppliers’ balance sheets. The minister pledged that a relevant Ministerial Decision will soon be issued that will resolve the issue