The island’s state-owned power company (EAC) has been turned into a charity organisation, DISY chief Averof Neophytou said, used to exercise social policy by providing vulnerable groups electricity at reduced prices, instead of affording them extra allowances to pay for it.
“The EAC is there to produce and distribute electricity,” he said. “If the state, correctly, needs to support the jobless, let us give them an extra allowance for their power,” Neophytou said.
At the end of the day, he said, the social policy exercised through semi-government organisations, is footed by businesses and the tourist sector, resulting in Cyprus having the highest industrial electricity prices in Europe.
However, vulnerable groups like large families, etc, are subsidised by other consumers who pay a small charge on their bill dubbed Public Service Obligations (PSO) — €0.00134/KW. This funds the 20 per cent discount afforded to vulnerable groups.
So far, 15,500 beneficiaries have been placed on the special tariff, out of a total of 42,500 – including guaranteed minimum income recipients.
It is understood that current PSO charges will not be enough to cover all those eligible if and when they register.
The DISY chief was speaking after a meeting with a delegation from the chamber of commerce and industry (KEVE), who said one of their main problems was the high cost of power.
Neophytou said there were no prospects for an industry “on its knees because of the highest cost of power in Europe.”
“We must believe in the capability of the Cypriot industry,” he said. “It creates added value and jobs.”
KEVE chairman Phidias Pilides highlighted the need for the state to boost industry to reflect its contribution to the economy.
The Cyprus Mail has learned that the EAC is currently conducting a study into its pricing system, which it will then submit to the energy regulator CERA sometime in the summer.
Upon submission, CERA will go to a public consultation where everyone will get a chance to give their view.
Meanwhile, the EAC announced on Wednesday that it will not be cutting off power to household consumers during Easter – between April 22 and May 8.
The company said those consumers who had their power cut off can apply for reconnection after making arrangements on how to settle their dues.
This does not apply to people who got cut off because of stealing power or went bankrupt. The latter should follow the standard practice applied for such cases, the EAC said.
The auditor-general has recommended that the state’s social policy be exercised by the government itself.
Two of the opposition parties weighed in.
AKEL’s spokesman Giorgos Loucaides accused Neophytou of pandering to interest groups and rather than try and protect consumers the DISY chief was trying to protect industrialists.
“If taxpayers take the burden of these costs then industrialists will pay next to nothing or not at all. Mr. Neophytou finds it unfair the EAC exercises a social policy for vulnerable people but at the same time he finds it absolutely fair that taxpayers support industrialists in various ways”
DISY hit back saying they were willing to support all vulnerable groups through social programmes jabbing at AKEL “which prefers everyone else pay extra costs.”
EDEK said the government should not mix social policy – supporting vulnerable groups, and helping the country’s industry which could be achieved by using alternative sources of energy such as photovoltaic systems to reduce the cost of electricity.