Ever increasing costs forcing consumers to restructure energy bills

Standing on the pavement outside the Electricity Authority of Cyprus (EAC), with a little boy in tow, Nitsa tells the Cyprus Mail about the agreement she’s just made to restructure her electricity bill.

Nitsa is 42. She’s a single parent and has six children, including the boy standing next to her. She and the six kids live in a three-bedroom house in a village about half an hour’s drive from Nicosia. Her total monthly income is €850, including benefits.

Her most recent, bi-monthly power bill came to about €400, considerably higher than in previous years – but the restructuring deal will allow her to pay in instalments, €200 by the middle of this month, then another €100 early next month, then the remainder.

Nitsa says she knows many other people making similar arrangements. “But you have to be reliable,” she adds.

The option to restructure one’s electricity bill is not officially available. The rule is that the entire sum must be paid as invoiced. However, this rule is increasingly bumping up against two objective – and uncomfortable – truths.

The first objective truth is that electricity bills have increased exponentially in recent years, to the point where many ordinary people are genuinely unable to pay them.

The second is that the optics of cutting off power to – for example – a single mother with six children are obviously terrible. No company wants that kind of bad PR, if they can avoid it.

There’s a third variable too – maybe not so objective, but still relevant when dealing with customers. A big reason for the hike in power bills – beyond the disruption caused by external factors like the war in Ukraine – is the EAC’s own ineptitude in continuing to burn heavy oil at its three power stations, dragging its feet over the switch to cleaner energy and paying for emissions credits (a fine, in all but name) to the EU. A staggering €247.9m was paid in 2022 alone, which of course gets borne by consumers.

In other words, the authority doesn’t really have the moral authority to insist on strict compliance with the rules at the moment – especially when people are doing their best to keep costs down. Nitsa, for instance, says she’s “taken out all the light bulbs” in her home, to prevent the children from wasting energy. “What else could I do? I was getting [bills of] €500, €600…”

The EAC had no comment when approached for this article. However, the practice of restructuring bills seems to be increasingly common.

“It’s easy,” claimed one customer outside the EAC building, mistakenly thinking we were asking for instructions on how to do a deal. “As long as you don’t have a history,” he added. “If you’ve done it in the past and you didn’t pay on time, then they won’t do it.”

Some cases are so blatantly unfair that restructuring seems to be the only compassionate option. 67-year-old Charalambos, for instance, worked in construction as an aluminium installer, but has been out of work since the crisis of 2013. He’s on a low pension of just €380 a month, with another €100 from other sources.

His most recent electricity bill came to €437, which is double what he paid last year, a combination of using more power (“It was so hot,” he explains ruefully) and a higher unit price. It also represents 90 per cent of his entire monthly income.

Fortunately, the EAC agreed to restructure: “I paid €300 now, and I’ll pay the rest at the beginning of next month”. Even that €300 is a huge chunk of his income. “I’m borrowing money from my sons to get by,” he admits.

Then again, not all cases have to be so extreme. Forty-year-old Panayiotis, for instance, is from Greece, with that air of breezy confidence one often finds in mainland Greeks. He himself approached the EAC, he says, and suggested paying his bill in two equal instalments, an offer they accepted.

The bill for his apartment was €354, significantly higher – once again – than last year’s equivalent, which he recalls as being around €180-200. Unlike Charalambos, he’s not living hand to mouth – but that doesn’t mean he can easily afford the increased expense.

“My monthly income is about €1,200,” he told the Cyprus Mail – “but, as I’m sure you understand, when you have €500 rent, and then if you also have €300 electricity… well, it just won’t come out.”

This is an important wrinkle. It’s always been understood that exceptions must be made for a small minority of very poor people. If we’ve reached the point where even those on normal salaries – €1,200 is below average, but not uncommon in the private sector – struggle to pay their energy bills, however, that’s a much bigger problem.

Small businessmen have also been hit by the rising costs. A coffee-shop owner who declined to give his name told us that his most recent bill was in the region of €1,000, around 25 per cent higher than last year’s – “and when I opened the shop, four or five years ago, it was 50 per cent lower”.

His restructuring deal allows him to “pay as I can”, making a number of small payments, as long as the whole sum gets paid off before a deadline. This is not the first time he’s come to the EAC requesting such an arrangement.

“I always do it,” he admits flatly. “Because the bills are too high.”

This is obviously a quick fix, albeit an increasingly necessary one. The real issues are systemic – and indeed, the price of electricity is predicted to go even higher.

Nitsa shudders when we ask about this coming winter. Her village is quite high up in the hills, and heating costs will surely make the bill even more unaffordable.

“I’ll do another restructuring,” she says hopefully.