THE ELECTRICITY Authority of Cyprus (EAC) yesterday categorically denied claims that it would increase electricity prices, but said instead it would gradually reduce them because of the reductions in international fuel prices.
The issue was raised when the head of the Cyprus Energy Regulatory Authority (RAEK) yesterday told Parliament it would not even consider examining an EAC request for a 10 per cent increase in tariffs unless the authority presented a complete five to 10-year plan on how to improve its productivity, functionality and reduce its operational expenses.
According to RAEK Head Costas Ioannou, who was briefing deputies on the energy situation at the House Commerce Committee, the Energy Regulatory Authority is not satisfied that the EAC’s demand is justifiable.
“We requested the submission of a complete plan on how the EAC will improve its productivity,” said Ioannou. “If this happens, we will examine their request.”
Committee Chairman Lefteris Christoforou of DISY condemned the EAC for even considering an increase.
Angelos Votsis of DIKO agreed. “All the political parties in the Committee today agreed that this is not the right time to justify increases in electricity tariffs,” he explained. “Cypriots are awaiting reductions in their next bills, not to be told they will be paying more.”
But the EAC yesterday defended its position. “All the increases that occurred recently are solely due to the increase in the price of fuel and we emphatically stress that the EAC has not made a profit of even a single cent,” a statement from the authority read.
“We wish to clarify that the EAC has submitted no new request for an increase in rates. We can only imagine that there must have been confusion over an old claim that the EAC had submitted to RAEK in November 2006.”
The statement said deliberations between the EAC and RAEK had been ongoing since then, but the EAC insisted it had asked that no increases be applied now until the fuel prices allowed it, and even then only in such a way that as not to cause economic and social upheaval.
“We regret that some people exploit the increase in the price of electricity, which as we stressed is due solely to the increase in fuel prices, to turn the public against the EAC.
“As for the operating expenses of the EAC, it is indicated that with the current fuel prices, 70 per cent of the total costs of the EAC are attributable solely to fuel.
“Regarding functionality, the EAC cares more than anyone about sorting out its finances and limiting its operating costs. To this end, it recently hired a well-known agency from abroad to reorganise the Authority, optimise its procedures and reduce costs, and they are already making progress in the effort to improve methods of operation to continue to offer the public electricity at the lowest possible price.
“We are at the disposal of RAEK, the Auditor-general, the CPC, or any other competent body to check the invoices of the EAC, to see if we benefited even by one cent from the recent increases due to fuel prices.”
RAEK head Ioannou also sought to reassure the public that recent reports on imminent increases in electricity bills were untrue. “Reductions are due in the next bills, because of the international reduction in oil prices,” said Ioannou, adding that RAEK had examined the methodology used by the EAC to estimate the reductions and found it was “satisfactory”.
THE EAC last month announced measures that would reduce bills for 165,000 households in Cyprus. The measures came into force on all bills calculated from October 1. The measures were made possible after the government renounced its €10 million share of EAC surpluses.
The beneficiaries are broken down into two categories:
Category A -Vulnerable Groups
n Families with three or more dependent children under a certain income threshold (annual household income not exceeding €51,258 a year, increasing by € 5,126 per child after the fourth child)
n Recipients of public benefits from the Welfare Department.
If they are not already registered as beneficiaries of existing discounts, people in the above categories can fill in a special form available from EAC Customer Services. If they are already registered on EAC records, the new benefits will be automatic. Inclusion in the new special tariffs will come into force when the next bills are issued for the period after October 1, provided that the customer has completed the application form.
These measures are an expansion of existing reduced rates (special tariff code 08) that already applies for large and disadvantaged families. The previous rates applied for families with four children and above.
Those customers eligible under the 08 code will see an expansion of the three charging bands, allowing greater consumption at the cheapest rates. The cheapest band goes up from 0-600kWh to 0-1000kWh, while the second band increases from 601-1200kWh to 1001-2000kWh; the third most expensive band, now starts from 2001kWh and above, up from the previous 1201kWh.
The measures cover more than 40,000 households and meet the demands of the Large Families Organisation and the Pancyprian Five-Member Families Organisation.
Category B – All households
“All household bills will benefit from the second set of measures,” Costas Gavrielides, EAC spokesman told the Cyprus Mail. For the next 12 months, households will receive a 20 per cent discount on their bills if they do not exceed 500kWh per two-month billing period. “You do not need to apply for this; this will be automatically deducted from your bill,” said Gavrielides. “This will last a year, so this means for the next six bills.”
These reductions are additional and independent of the ones expected for the coming winter months due to international reductions in the price of mazut. Electricity bills issued for November will have a 3 to 4 per cent reduction, and bills issued in December will have a 7 to 8 per cent reduction.
Kilowatt-hour kWhr
If you have ever looked at your home electricity bill, the bill is composed of sections operating under different tariffs. Each meter in the meter box is driven at a rate proportional to the current passing into the house through the wiring allocated to the meter. The major electrical devices in the house such as stove, groups of power points, lights, are each allocated a meter. The meter is calibrated in “units” which are actually kilowatt-hours, a convenient measure of energy used by the power companies.
1 kWhr = no. of kilowatts turned on in the house x no. of hours
