Employee rights last stepping stone for opening electricity market

By the end of May all outstanding issues pertaining to the Transmission System Operator (TSO) must be resolved – a prerequisite for opening up the electricity market to competition – lawmakers said on Tuesday.

What is at stake is rendering the TSO a fully autonomous agency so that it can act as market operator once the electricity market opens up. The TSO currently relies on seconded staff from the state-run power utility – a stakeholder which also holds a virtual monopoly.

Once the TSO becomes independent, it can then hire staff on its own rather than ‘borrow’ people from the Electricity Authority of Cyprus (EAC).

But before that happens both government and parliament must address the issue of employee benefits – since the TSO draws most of its staff from the EAC, and will likely continue to do so given their expertise.

Trade unions are adamant that none of the EAC people lose any of their rights or benefits once definitively transferred to the TSO. The previous government acquiesced to these demands.

But how this will be done, and what it will mean for the status of TSO staff in the future, is the sticking point.

In parliament, Energy Minister George Papanastasiou said that already the government has secured the right of these people to the pension and provident funds, on exactly the same terms as under the EAC.

The issues still pending are five: the employees’ welfare fund; the scientific staff welfare fund; the medical care fund; the employees assistance fund; and the scientific staff assistance fund.

The question is who will put money into these funds as the employer – the TSO or the EAC. If the latter, MPs heard, then that will cast a shadow on the independence of the TSO and lead to accusations that its staff are still ‘under the thumb’ of the EAC.

The reason is that the regulations governing EAC funds stipulate that a member must be a full-time employee of the EAC.

And representatives of EAC workers told parliament that, as of now, the TSO is not in a position to pay into these employee funds – meaning the funds would continue being financed by the EAC.

EAC director Adonis Yiasemides said that, going forward, they want to avoid the impression that the state-run power corporation interferes in the competitive electricity market.

“Every chance they get, some will accuse the EAC of manipulating the TSO staff,” he remarked.

Instead, he proposed that the benefits of EAC employees seconded to the TSO be calculated, and a one-time payout made to these employees before they are definitively transferred.

“In this way, the TSO can become truly independent. If something else is decided, we will agree to it, but we won’t accept any accusations that the EAC is obstructing or meddling with the TSO.”

For his part, chair of the House energy committee Kyriacos Hadjiyiannis (Disy) stressed that they’re working against a tight deadline – May 30.

By that date, he said, a great deal needs to be done – the two vacant managerial positions at the TSO must be filled, the regulations must be amended to make the TSO a co-financing authority in the EAC’s pension and provident funds, and seconded staff from the EAC must formally declare whether they wish to become full-time employees of the TSO.

“No EAC employee choosing to remain at the TSO will suffer any adverse consequence whatsoever, no removal of rights which he or she enjoyed having the status of an EAC member of staff,” said Hadjiyiannis.

Akel MP Costas Costa held reservations about the mooted arrangements. He asked how the independence of the TSO will be assured when the staff transferred to the TSO will still have their various funds with the EAC.

“Today we stressed to the minister that this troubles us… as conflicts of interest may arise.”

The platform for the Competitive Electricity Market (CEM) will include financial markets of the stock market type, which are the futures market and the day-ahead market, but also other types of markets, such as the real-time balancing market ensuring the energy balance between production and demand.

This will be run by special software operated by the TSO.

Originally, the electricity market was due to have been opened up in July 2014; it was then pushed back to July 2016, then to July 2019, next December 2020, October 2022, and most recently the middle of 2023.