EAC fi­nally on the right track

E DII TO RII A L

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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