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Although the plan to privatise the electricity authority was shelved by parliament last April, the utility’s management, undeterred by boardroom politics and trade union antics, seems to have returned to its initial mission of providing a safe, affordable and constant supply of energy to the consumer.
The EAC is currently conducting a public consultation on its long-overdue revised and simplified tariff policy that should kick in by May next year. The essence of the new rates is that the various and often frustrating billing sub-categories have been slashed from 30 to just 11, as a result of which large volume consumers will benefit the most.
Ideally, this should mean that industry and large service companies (supermarkets, banks, office blocks, etc.) will soon see their electricity bills being trimmed by 19% to 45% on the basic tariff, helping to lower productivity costs and make Cyprus more competitive once again. On the other hand, households will see an increase of 22% in the lowest consumption category and a drop of up to 8% on their bimonthly bills.
Why this streamlining of tariffs could not be implemented earlier is anyone’s guess, although ‘rigidity’, ‘old mentalities’ and ‘bureaucracy’ are words that come to mind.
Naturally, prices will continue to be influenced by stability or volatility in the oil markets, as Cyprus is still a crude buyer and has yet to convert power stations to natural gas, until the right price has been concluded. In the meantime, it is also paying penalties for spewing carbon emissions, something that could have been prevented long ago. Although projections of the price difference from when natural gas will be used is a well-kept secret at the EAC, at least the utility will now be able to buy energy for distribution purposes from other suppliers, mainly from the renewable energy source (RES) producing wind farms and solar parks, a sector in which the Authority, too, has wisely invested.
However, this does not change the scheduled ‘operational separation’ that will go ahead as planned on December 1, according to the regulator CERA, when the EAC will split its operations to ‘producer’ and ‘distributor’. Ultimately, this means that any privateer will be able to buy wholesale from the EAC or the EAC grid and sell to its own network, while at the same time, the Authority will also be able to import electricity from interconnectors, including the EuroAsia Interconnector once the Israel-Cyprus cable comes online in 2020. By then, and including the natural gas production at Vassiliko power station, the cost of electricity should hopefully drop further.
