Major discount on power rates for smog days

Some 4.5 million households in Greece stand to benefit from government measures aimed at reducing air pollution with power rate discounts of around 70 percent, which would mean a 55 percent drop in the total amount of electricity bills.

Those households do not include the approximately 470,000 that are on the list for the so-called Social Rates. According to a government decision, poor households will recieve two days of free electricity for every day that regional authorities deem that the concentration of particulate matter suspended in the air exceeds 150 micrograms per cubic meter.

The extension of the measures beyond sensitive social groups was decided in a meeting held last week at the Finance Ministry, with the joint ministerial decision for the implementation of the plan expected in the coming days. Sources say that the decision will provide for a 70 percent discount in the power consumption section of the bill. Regulated charges such as levies for network maintenance and renewable energy sources will not be reduced, meaning the final discount for every bill on those days will amount to 55 percent.

This considerable drop in rates will concern consumers of up to 2,000 kilowatt/hours per four months, a category that covers all low and middle incomes and totals

problems with smog. The government intends to offer consumers lower electricity rates on days when the concentration of particulate matter reaches emergency levels to ease the problem. 4.5 million households. The discount has no income conditions attached, as the government has decided that middle-income homes should also get this form of support in order for the measure to be most effective. The aim is to stop people from using fireplaces and wood-burning stoves to heat their homes on the days when the concentration of particulate matter reaches emergency levels.

The cost of the measure is estimated at between 30 and 50 million euros per year and will depend on weather conditions, as they will determine the frequency of its application, as well as the response by consumers. It has emerged that the cost will be covered by the primary surplus of the 2013 budget along with funds from the 2014 budget.

The measure will be automatically activated with each regional authority’s announcement about smog exceeding a certain level, and will apply for as many days as the smog stays above that level. The regions to have reported the highest concentrations of smog according to last winter’s data are Attica, Thessaloniki, Ioannina and Larissa.

Clearly the response of consumers will be key to the measure’s success as it has no compulsory character. It rests on citizens’ sense of social responsibility, although the motive will be strong. Government officials concede that the state and electricity utility Public Power Corporation will be unable to monitor the application of the measure as there are no meters recording hourly consumption. Consequently they do not rule out the possibility of certain consumers taking advantage of the considerable discount to reduce their spending on electrical energy and continue burning wood in fireplaces and stoves.

What has raised some eyebrows in the energy market, though, is the fact that the Energy Ministry has not also enlisted natural gas in the battle against the smog in Athens, Thessaloniki and Thessaly, where the fuel is available, as these regions also have a major problem with the phenomenon.

At least heating oil has this year contributed more in the battle against the smog, as the expansion of income criteria for the heating oil benefit to consumers has seen a significant part of the market return to this safe form of fuel for heating.