Cyprus Mail
Business Cyprus

‘EAC has no right to set electricity prices’

By Staff reporter

ENERGY regulator CERA on Tuesday said the electricity authority (EAC) did not have the power to set prices without approval and the government could not exercise social policy through electricity bills.

CERA’s statement came a day after the EAC proposed scrapping an 8.0 per cent reduction on bills, valued at around €50 million, because it would adversely impact the company’s market value at a time when privatisation was on the cards.

Rather than deducting the €50 million directly from bills, the EAC said it could give the amount as a dividend to the government, which would then find a way to return it to consumers.

The EAC has appealed the decision in court.

“CERA wishes to point out in the most categorical way that the EAC cannot set prices without CERA’s approval, neither does the law allow the government to exercise social policy through the price of electricity,” the regulator said.

The increase of the organisation’s value is not ensured by price rises but through strict rationalisation of its structure, savings and increase of productivity, CERA added.

CERA’s duty, among others, is to protect the interests of consumers, promote the development of a financially viable electricity market, ensure supply and regulate prices, a statement said.

“All prices and charges provided for by the law should reflect the cost of providing these services.”

CERA said it recently decided to cut the price after judging that the EAC’s expected profit in 2013 would be the same as the previous year, over €100 million.

The EAC is one of a number of state-owned enterprises slated for privatisation by 2017.

In the meantime it has to slash costs and turn more competitive – and thus become more attractive to prospective investors.

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