Political pressure mounts on the Electricity Authority of Cyprus (EAC) to halt a proposed 6% electricity bill increase for 2024. Lawmakers challenge the state-owned provider to dip into cash reserves instead of raising costs for consumers amidst scrutiny over its monopoly status and profits.
Why is there political pressure on the Electricity Authority of Cyprus (EAC) to stop price hikes?
Political pressure on the EAC is to prevent a 6% electricity bill increase for 2024, urged by MPs who challenge the state-owned provider to use cash reserves instead of burdening consumers with higher costs amidst rising living expenses and scrutiny over its monopoly status and profitability.
Political Pressure Against Electricity Bill Increase
MPs applied significant pressure on the Electricity Authority of Cyprus (EAC) during a session on Tuesday, challenging the state-owned power provider to reconsider its proposed six per cent electricity bill increase for 2024. The EAC, which has submitted its request to the energy regulator, is now faced with political opposition and is compelled to re-evaluate its financial strategy to determine whether the planned rate hike can be withdrawn.
EAC’s general manager, Adonis Yiasemidis, addressed the MPs, indicating that a decision would be made within ten days. He highlighted the financial challenges the utility has faced, emphasizing that the EAC has absorbed costs to protect consumers from even higher rates. Notably, Yiasemidis cited a previously requested 13 per cent increase aimed at covering uncontrollable expenses such as fuel, emission allowances, and taxes.
EAC’s Financial Decisions and Discounts Offered
Despite the challenging economic environment, the EAC has previously made efforts to alleviate the financial burden on its customers. In the wake of the coronavirus pandemic in 2020, it implemented a 10 per cent price reduction for consumers, which amounted to a €32 million financial impact on the utility. The EAC also provided substantial discounts on network usage fees in late 2021 and early 2022, totaling €22 million in consumer savings.
Considering these discounts, the EAC has offered a cumulative €54 million in reductions over recent years, which is not included in the current rate hike considerations. Amidst examining the organization’s financial status, lawmakers are urging the EAC to utilize its cash reserves instead of increasing rates, suggesting that this could prevent the additional financial strain on consumers during a period of high living costs.
Monopoly Status and Profitability in the Spotlight
The parliamentary discussion also touched upon the EAC’s monopoly over the electricity grid, which includes distribution and transmission. Yiasemidis pointed out that the grid’s operation and maintenance represent a mere 10 per cent of their total expenses. Additionally, he noted that the EAC is restricted from purchasing power generated by other companies, including those harnessing renewable energy sources. Currently, the EAC only operates two solar parks.
However, the EAC’s monopoly status was challenged by MPs, especially in light of the organization’s reported €64 million profit from the previous year. Politicians like Disy MP Kyriacos Hadjiyiannis and Akel’s Costas Costa expressed their opposition to the rate hike, with Costa emphasizing the need to reduce electricity costs for people grappling with the high cost of living. The MPs condemned governmental delays in adopting natural gas, upgrading the transmission system, and opening the electricity market—factors contributing to the high electricity costs.
Looking Forward
The discussion in parliament reflects widespread concerns over increasing living costs and the impact of energy prices on consumers. The EAC’s decision in the forthcoming days will be pivotal in addressing these concerns and will be closely watched by both the public and the political sphere. The MPs have set a clear expectation for the EAC to reconsider the rate hike, with a follow-up discussion anticipated in two weeks, aligning with the timeline provided by Yiasemidis for the EAC’s decision-making process.
Why is there political pressure on the Electricity Authority of Cyprus (EAC) to stop price hikes?
Political pressure on the EAC is to prevent a 6% electricity bill increase for 2024, urged by MPs who challenge the state-owned provider to use cash reserves instead of burdening consumers with higher costs amidst rising living expenses and scrutiny over its monopoly status and profitability.
What efforts has the Electricity Authority of Cyprus (EAC) made to reduce the financial burden on consumers?
The EAC implemented a 10% price reduction for consumers in 2020 during the pandemic, amounting to a €32 million impact. Additionally, the EAC provided discounts on network usage fees in late 2021 and early 2022, totaling €22 million in savings for consumers. In total, the EAC has offered €54 million in reductions over recent years.
What concerns were raised about the Electricity Authority of Cyprus (EAC) regarding its monopoly status and profitability?
Lawmakers challenged the EAC’s monopoly over the electricity grid and questioned the organization’s reported €64 million profit from the previous year. MPs criticized governmental delays in adopting natural gas, upgrading the transmission system, and opening the electricity market, contributing to high electricity costs amidst high living expenses.
What is the timeline for the Electricity Authority of Cyprus (EAC) to make a decision regarding the proposed rate hike?
The EAC’s general manager, Adonis Yiasemidis, stated that a decision regarding the proposed rate hike would be made within ten days. Lawmakers expect a follow-up discussion in parliament in two weeks to address the outcome of the EAC’s decision-making process.
