Cyprus hikes electric prices

The Electricity Authority of Cyprus received the green light from the Energy Regulator to increase the price on electricity bills by 1.5% from 1 January 2010, the first of a total of 4.5% price hike to be spread over 3 years. The planned price increases are forecast to boost the EAC’s coffers to the tune of EUR 10 mln annually.
EAC’s chairman, Haris Thrasou said that this will be the first time an increase will be imposed on electricity prices in the last twenty years, but he failed to note what savings the organisation has managed to deliver by shifting to modern production techniques.
Trade Union officials meanwhile rejected any freeze on pay or other benefits that they have managed to win without comparative increases in productivity. Thrasou said the total value of the cost-cutting measures amounted to several million euros but once again lacked detail.
Energy Regulator Costas Ioannou announced the scale of the price increases. Ioannou, is vacating his post to assume his new position as head of the Natural Gas Public Corporation, a government majority-owned corporation in which the EAC itself has a 44%. The next increase in electricity bills would be implemented in increments of 1.5% in 2011 and 2012.
Opposition DISY deputy, Lefteris Christoforou, Chairman of the House Commerce Committee, commenting on the developments, said that the increase in the electricity tariff could be offset by a reduction in the rate of VAT charged on electricity, but there was no word from the Ministry of Finance on the suggestion.