Multi-rate electricity tariff ‘more expensive’ for most

THE new “multi-rate” electricity tariff introduced by the government this week will only benefit heavy energy consumers, it has been suggested.

The multi-rate tariff, which includes different charges for electricity used during “peak”, “off-peak” and “normal” times of the day, was announced last month and came into effect on Tuesday, November 1.

Unlike the previous multi-rate tariff, which consumers had to opt out of, bill payers have to apply to the Cyprus Turkish Electricity Authority (Kıb-Tek) if they want to switch to the new tariff, otherwise they will continue on the existing “single tariff” electricity plan.

Based on the multi-rate tariff fees announced in October, electricity used between the “normal” time of 7am and 5pm is charged at 3.3285TL per kilowatt hour (kWh).

“Peak time” energy usage, between 5pm and 10pm, costs 4.646TL per kWh, while electricity consumed during “offpeak” hours (10pm to 7am) is charged at 2.1941TL per kWh.

In comparison the standard tariff – which is based on how much electricity a consumer uses rather than when they use it – costs 1.6110TL per kWh for the first 250kWh used each month; then 3.3237TL for consumption between 251 and 500kWh; 3.5737TL for consumption between 501 and 750kWh; 3.8737TL for consumption between 751 and 1,000kWh; and 4.6237TL for consumption of 1,001kWh and above.

Many consumers are adopting a “wait and see” approach before deciding whether or not to switch to the new tariff, particularly

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as the milder weather in November means that household electricity consumption tends to be lower compared to the high demand in summer and winter.

Due to the lack of any illustrative examples from Kıb-Tek, experts have been sharing their own estimates of what bills might look like under the multi-rate tariff compared to the standard-rate tariff.

Former Kıb-Tek board member Yusuf Avcıoğlu said that based on his sums, most people would be worse off under the multirate tariff, even if they were able to shift 50 per cent of their consumption to off-peak times, which he said would be a tall order.

According to his calculations, a bill for 300kWh electricity consumption would be 568.94TL under the standard-rate tariff, while the amount to be paid under the multi-rate tariff increases to 924.10TL, nearly double.

For 600kWh of electricity, the cost would be 1,591.05TL on the standard rate tariff, but 1,848.20TL on the multi-rate tariff.

At 900kWh of consumption there is little difference between the two tariffs, with the bill coming to 2,708.16TL on the standard-rate tariff and 2,772.29TL on the multirate tariff.

Mr Avcıoğlu said that consumers would only start to see a clear saving with the multi-rate tariff if they have monthly energy consumption of 1,200kWh, which would cost 4,020.27TL on the standard-rate tariff, but drops to 3,696.39TL with the multirate tariff.

At the top end, a household with 2,000kWh of consumption would be hit with a bill of 7,719.23TL on the standard-rate tariff but 6,160.65TL on the multi-rate tariff.

Mr Avcıoğlu stated that under “normal living conditions” a family needs 600-650kWh of electricity a month to live a “humane life”, noting that therefore most would be better off not switching to the multi-tariff.

He added that realistically only 35 to 40 per cent of households’ monthly consumption can be shifted to the cheaper multirate tariff times, meaning that actual bills could be even higher than his estimates.

Cyprus Turkish Mechanical Engineers Chamber chairman Ayer Yarkıner told Cyprus Today’s sister newspaper Kıbrıs that the implementation of the multi-rate tariff “was not planned properly”, that the unit prices “were not determined correctly” and that it would not help the vast majority of consumers to save money on their bills.

He added that the previous “You’re In Control” multi-rate tariff, which had been in place for nearly three years before the government scrapped it in February, had provided financial support to the public, but that this is not the case with the new multi-rate tariff.

Meanwhile Prime Minister Ünal Üstel said on Thursday that problems associated with electricity production in the TRNC will become a “thing of the past” by the end of next year.

Speaking at a press conference in Lefkoşa, Mr Üstel said that negotiations are ongoing with Turkey to “put an end to all the problems with the production of electricity in the North”.

“We will bring permanent solutions to all the electricity problems,” he said, reiterating previously announced plans to connect the TRNC to Turkey’s electricity grid via an undersea power cable.

He also announced plans to sign a new five-year fuel oil supply contract with Turkish Petroleum International Corporation and that filters will be installed at the chimneys of the Teknecik power station on the northern coast of the island in 2023.