Cyprus Mail

EAC announces further price drop (updated)

By Elias Hazou

The price of electricity is to be reduced due to falling oil prices, the Electricity Authority of Cyprus (EAC) announced on Tuesday.

April’s household bills will see a 1.2 per cent decrease in the unit price of electricity, relative to the previous month, and a total 9 per cent decrease compared with February’s prices.

A year-on-year comparison reveals a 20 per cent decrease in the price of electricity.

Meanwhile, energy minister Giorgos Lakkotrypis has promised to meet anew with EAC workers’ unions in a bid to avert a potentially crippling showdown over government plans to privatise the power utility.

“We are committed to continuing the dialogue… and over the next days I shall have a private meeting with the unions in an attempt to bridge any differences,” the minister told reporters on Tuesday after a session of the House commerce committee.

The dialogue with the unions would be based on the suggestions made by the chairman of the commerce committee, Lakkotrypis said.

On Tuesday, committee chairman Zacharias Zachariou (DISY) proposed pushing back further the tender deadline for a study on the legal separation of the EAC.

The deadline was initially set to expire on March 31, but through the commerce committee’s mediation last week, it was delayed to April 15 – temporarily averting planned strikes by EAC workers that would have led to power outages.

Last Thursday, the Privatisations Commissioner announced that a tender deadline for a study on the legal separation of the EAC would be pushed back by two weeks. In turn, the trade unions said they would likewise suspend any industrial action until April 15 as a goodwill gesture.

Zachariou’s proposal also envisages modifying the terms of the tender, following consultations with all the stakeholders.

“Cyprus and its economy cannot afford strikes at the moment, and it is not right for consumers to be left without electricity during Easter,” the MP later said.

“Candles should be lit only to celebrate the Resurrection, and not for illuminating our homes because there is no power,” he added.

The MP said he felt the two sides – the energy ministry and the EAC – are closer to each other than they realise.

“They just don’t know it yet. In order that they do realise it, we shall be convening again before the end of the week, giving them a chance to reach an agreement that will be to the benefit of the economy, the consumers, the EAC and the workers whose rights are enshrined in law.”

For his part, head of the EPOPAI-SEK trade union Andreas Panorkos welcomed the dialogue but warned the strike measures have been suspended, not cancelled.

He went on to remark that EAC employees might spend the Easter holidays at home, hinting at possible strikes during this time.

The Privatisations Commissioner has initiated a tender for the appointment of an independent energy advisor “to provide professional services regarding the preparation of a study for the legal unbundling, the corporatisation and the privatisation of the Electricity Authority of Cyprus, and the required regulatory review.”

EAC unions want the tender scrapped, and a new study initiated, to be carried out by them, the EAC and the energy ministry – taking the Privatisations Commissioner out of the loop.

The unions say the tender documents incorporate a memo put out by the ministry, which proposes that the energy regulator impose a power generation quota, or cap, on the EAC so that new players are encouraged to build power units.

The ministry has also proposed downsizing the EAC, selling off its assets to investors abroad, and leasing its most efficient power engines to local private operators.

The ministry memo is partly based on a study commissioned by the energy regulator late last year regarding changes to the energy market.

The regulator is currently examining stakeholders’ – including the EAC’s – comments on that study; it’s understood that the regulator will issue a finalised study sometime this month.

Under the terms of an international bailout deal, Cyprus has to raise €1.4bn by privatising state-owned enterprises.

Under the road map agreed by the government and international creditors, the EAC is to be transformed into a corporation governed by private law by the end of 2015, with all of the company’s shares held by the state. Full privatisation of the EAC – however this is implemented – must be completed by 2018.

EAC employees, who fret for their jobs, argue that privatisation as envisaged by the government will not lead to a drop in electricity prices.

The domestic price cuts announced Tuesday will be matched for commercial, industrial, and street lighting, the authority added.


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