Cyprus Mail

Lack of staff hampering energy changes

Understaffing at the Transmission System Operator (TSO) is further delaying the implementation of new regulations governing the energy market, MPs heard on Monday.
The plan had been for independent power producers to enter the market by May this year. That requires the TSO obtaining special software, and in turn technicians capable of operating it.
The TSO says it needs 24 extra persons, who were to be seconded from the Electricity Authority of Cyprus (EAC). The TSO requested the staff last summer, but the EAC has yet to comply with the request.
At the House finance committee, which discussed the EAC’s budget for 2016, the EAC denied stonewalling the request, saying it was unable to comply as it could not find specialised technicians for the job.
For its part, the energy ministry – which has jurisdiction over the state power company – said it lacks the means to force the EAC to second staff to the TSO.
Responding to MPs’ questions, ministry officials said March 2017 now looks like the earliest date the new energy market model can be rolled out.
But TSO officials pushed this back further, saying that were the specialised technicians to be hired today, it normally takes six months for the red tape to go through, plus another year for the software system to become fully operational.
DIKO MP Angelos Votsis, acting chairman of the House finance committee, wondered how it has not been possible to find 24 employees out of the EAC’s 2300 staff.
“From what we heard today, we are not convinced that any timetable does exist [for the new market model],” he told reporters.
The Greens’ George Perdikis speculated that “invisible hands” were holding up the liberalisation of the energy market.
In May last year the Cyprus Energy Regulatory Authority (CERA) published its final regulatory decision for the new state of affairs in the energy market, proposing that the EAC’s operations are unbundled.
CERA proposes the ‘net pool’ model, where the operations of the state power company (EAC) are unbundled, and the EAC’s production and supply operations separated. EAC Production will then strike bilateral agreements with suppliers (EAC Supply and private players) for the sale of energy, at regulated prices. Other licensed operators may also participate.
In a related development, the energy ministry said on Monday that the position of general manager at the EAC would remain vacant in light of the coming legal separation of the entity in 2017.
In that year, the EAC – which is currently implementing an accounting separation – is to be split into two legal entities and will also absorb the TSO.
The EAC’s budget for 2016 provides for expenditures of €724 million (down from €739 million last year) and revenues of €741 million.
The budget’s main goals are the successful implementation of the operational and accounting separation, restricting to the bare essentials projects to develop the production, distribution and transmission grid, and maintenance of equipment and facilities.
The number of employees at the EAC will be reduced by 83 compared to last year.
An actuarial report previously carried out by ΑΟΝ Hewitt on the EAC’s assets and liabilities found that the organisation had a deficit of €188.9 million as of December 31, 2014.

The hole is to be plugged over a period of 18 years. For this year, the budget includes a fund of €11 million allocated to that purpose.

The EAC’s liabilities to banks currently stand at €440 million. These are low-interest loans which are being serviced, MPs heard.
Legislators are meantime mulling having EAC employees contribute 1.5 per cent of their wages toward health care, bringing them in line with other public-sector workers.

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