/

EAC appeals veto on 25% electricity bills hike

1766 views
1 min read

The Electricity Authority of Cyprus (EAC) is at odds with the Energy Regulatory Authority (CERA), which blocked its move to increase electricity bills by a whopping 25%, fearing consumer outrage.

According to a Phileleftheros report, the EAC is planning to contest a decision by CERA denying its request for an approximate 25% increase in basic electricity tariffs.

EAC sought the tariff hike to cover recoverable costs associated with its operation, previously approved by CERA.

The appeal to the Administrative Court will evoke Article 20 of the law governing CERA’s establishment and operations, reports Phileleftheros.

This article stipulates that decisions and regulatory actions of CERA can be subject to judicial review, and parties can appeal such decisions before the Administrative Court.

The EAC initially made its request to CERA in March, contending that the increase would be smaller than the proposed 25% without pointing at an exact figure.

It argued the aim was to recover operational costs and other expenses that had already received prior approval from CERA.

These costs were related to approved development and green transition programs endorsed by the regulator.

CERA’s rejection came after nearly seven months and was preceded by substantial concerns expressed by the regulatory authority and the Energy Ministry.

According to Phileleftheros, the Ministry of Energy favoured the withdrawal of EAC’s request, considering the significant recent electricity cost increase and the potential consumer backlash that a new 25% tariff hike could incite.

CERA did not claim that EAC’s calculations were wrong but cited under pressure Cypriot households.

It argued that hiking energy prices also adversely affect businesses.

Given the exceptional economic circumstances and global economic crisis, CERA’s primary concern was protecting consumers from monopoly pricing.

Therefore, CERA decided that maintaining 2022 tariff levels, which had already increased by 14% compared to 2021, was in the public interest.

EAC chair Despina Theodosiou said the decision increases “the financial strain on the EAC, which will lose €107 mln, posing both short-term and long-term risks, particularly in executing the approved development program”.

The board conducted a technical and financial analysis to determine the organisation’s future actions, focusing on benefiting consumers and ensuring EAC’s sustainability.

After the analysis from technical experts and legal advisors, the board decided to challenge CERA’s decision.

This isn’t the first time EAC has appealed CERA’s decision to block price increases.

In March 2014, EAC contested CERA’s decision regarding its revenues.

At that time, the EAC sought to annul CERA’s decision to impose a permanent 8% reduction in basic tariffs.

EAC trade unions disagreed with the board’s decision and called for the appeal’s withdrawal, stressing that decisions should prioritise consumer interests.

Eventually, the appeal was withdrawn, but only after a lengthy period of contention.