Energy regulator will remain to see through electricity hikes

COSTAS IOANNOU will not step down as head of the Cyprus Energy Regulatory Authority (CERA) until he has negotiated with the electricity utility a proposed hike in electricity rates.

The regulator and the Electricity Authority of Cyprus are currently in a round of consultations over a proposed 2.0 per cent increase in the basic price of electricity, which the EAC says is crucial to ensuring its economic viability. The increase would be the first since 1983.

The energy industry watchdog and the EAC are looking into ways aimed at reducing the latter’s operational and financing costs, thereby minimising any projected price increase. Around the end of October, CERA will present its final decision on any price increase to the House Energy Committee as part of the formal approval process.

In the meantime, Ioannou, who is currently the head of an independent body, has been appointed chairman of the Natural Gas Public Corporation, a government majority-owned corporation in which the EAC itself has a 44 per cent stake.

The corporation is the administrator of the government’s natural gas energy policy, and among other things will be responsible for inviting tenders for the supply of natural gas.

But Ioannou’s change of roles has been put on hold until he has closed a deal with the EAC – essentially his future employers – on the electricity rate hikes. Ioannou is expected to formally take up his new role later this month or early November.

Reports say the position of head of CERA could remain vacant until January, when the terms of the two other officers there expire.

In the past, Ioannou had also served as general manager of the EAC.

The whole issue of “fuel cost adjustments” raises once again the issue of EAC’s total reliance on fuel oil for energy production, and the failure of successive governments to resolve the issue of securing a competitively-priced supply of liquid natural gas.

Fuel currently accounts for 60-70 per cent of electricity production costs, quite apart from the accumulating fines imposed by the EU for excessive carbon dioxide emissions, which are the direct result of EAC’s reliance on fuel oil.

The Minister of Commerce is said to be keen to get the Natural Gas Public Corporation rolling. The minister has instructed the preparation of documents inviting tenders for the supply of natural gas.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.