By Elias Hazou
THE ELECTRICITY Authority of Cyprus (EAC) has long-term loans worth some €500m, and is currently owed around €100m in electricity bills, the power company said on Monday.
The figures were cited by EAC officials during discussion of the organisation’s budget for 2015 at the House finance committee.
Out of the €100m in outstanding payments due, €15m concern bills where the electricity supply has been cut off, and €35m relate to active accounts for payments in arrears.
Half of overdue bills belong to businesses, the other half to households, EAC general manager Stelios Stylianou told MPs.
He said the EAC is implementing repayment schemes with a 4.5 per cent interest.
The remaining €50m relate to billing for electricity that has yet to be collected.
Amid the financial squeeze, 600 households have seen their electricity cut off for not paying their bills.
EAC chairman Othonas Theodoulou said however that the figure of 600 was not necessarily accurate now, as some of these households may since have either migrated or moved to other addresses.
When the EAC contacted these 600 consumers to reach a repayment agreement, only 35 opted to have their power supply reconnected, he said.
Defending its move, the EAC said cutting power to these consumers came before a decision by the energy regulator.
Earlier, the Cyprus Energy Regulatory Authority had ordered the EAC not to cut power to selected households from December 15, 2014, to March 31 this year.
The EAC is now expecting the energy minister to issue a decree specifying which households will be guaranteed uninterrupted power. It’s understood that around 15,000 persons will be eligible.
Theodoulou said for some groups in financial trouble the EAC has decided to keep supplying them with low-amperage electricity so they can at least keep their lights on.
The EAC, itself feeling the squeeze, says it cannot indefinitely subsidise consumers.
In 2015 the EAC will post a surplus of €10m, compared to €30m last year. Its budget for 2015 comes to €739.6m.
As part of efforts to tidy up its payroll, the state-owned company is implementing an early exit programme, which according to EAC officials will generate savings of €38.2m.
Under the scheme, by the end of March, 123 employees are to retire early, followed by a second batch later of some 140 staff.
The EAC is one of several state-owned enterprises slated to be privatised. To pay down a €10bn international bailout, Cyprus must generate proceeds from privatisation of at least €1bn within the bailout programme period (by 2016) and €0.4bn outside.
Under a road map submitted by the government, by the end of this year the power company is to be transformed into a company governed by private law, with all its shares initially owned by the state.
According to Theodoulou, the process of seeking ‘strategic investors’ would begin in 2017-2018.
EAC workers, fretting for their jobs if denationalisation goes ahead, are up in arms over the plans. They have authorised their unions to call strikes should these plans go forward.
Meanwhile, in addition to the €100m in outstanding bills, the EAC says it is owed €1bn, in today’s prices, by Turkish Cypriots.
For the Pyla community, since 1964 after the intercommunal riots, the then government had decided for political reasons to supply free electricity to the Turkish Cypriots and this practice continued after the invasion in 1974. All governments, aware of the political sensitivity of the issue, have supplied electricity.
The EAC’s Stylianou informed MPs, however, that a political solution was being promoted. The issue of electricity supply to the occupied areas was being discussed by the working groups and technical committees of the two communities tasked with paving the way to full-fledged peace negotiations.