The electricity authority (EAC) announced on Wednesday it will take the energy regulatory authority (Cera) to court to appeal Cera’s rejection of its request for a 25 per cent increase in basic tariffs.
It is the latest twist in the ongoing rumblings from stakeholders within the electricity authority.
EAC unions, meanwhile, have expressed mounting dissatisfaction over the total absence of progress on a number of demands already agreed upon with the previous energy ministry and administration heads, while a looming shake-up in the composition of the current board is due at the end of January.
The EAC’s move to appeal against Cera comes in the midst of concern over soaring bills as well as on the heels of the energy minister walking out of a meeting on Saturday amid speculation over a troubled state of affairs between the energy ministry, the EAC board of directors and the unions.
The appeal against the tariff increase rejection by Cera on September 15 was taken by the EAC in order to recoup recoverable expenses previously approved by the regulatory authority, daily Philenews reports.
The appeal will be made on the basis of article 20 of the law, on the establishment and operation of Cera, which provides that “decisions, regulatory decisions and decrees issued by Cera are subject to judicial review, following an appeal that may be brought to the Administrative Court, in accordance with the provisions of Article 146 of the Constitution of the Republic of Cyprus.”
EAC had requested in March 2023 from Cera to increase the basic tariffs by approximately 25 per cent, to recover operational costs to be incurred by the implementation of its (pre-approved by Cera) renewable energy source (RES) development projects.
The rejection of the EAC’s request for the increase came seven months after it was submitted, following strong concerns from the regulatory authority and pressure from the energy ministry which balked at consumer reactions to yet another cost hike.
In its negative decision Cera invoked extraordinary economic conditions and public interest. “The constantly high energy prices have an increasingly negative impact on citizens and businesses [and] Cera’s concern and duty is to protect consumers against monopolistic prices,” the decision stated.
The regulatory body argued that given the global economic crisis it was in the public interest to keep the tariffs at a 2022 level, noting that these had risen by 14 per cent since 2021.
EAC president Despina Theodosiou, for her part, in a statement to the daily news source earlier in September, said that depriving the EAC of funds put its development goals at risk.
“The continued deprivation of funds from the EAC, which by Cera’s decision are estimated to be a lost income of €107 million, leads to short-term and long-term risks […] for example [affecting] implementation of its approved development programme,” she said.
Theodosiou had added the EAC Board decided to carry out a technical and financial analysis of the effects of Cera’s decision to determine next steps for the “benefit of consumers and [the] sustainability of the organisation”.
The outcomes of the analysis prompted the filing of the appeal for several reasons, including to avoid setting a precedent of rejection of EAC requests for the recovery of approved costs through basic pricing.
In 2014 the electricity authority had also appealed against a decision by Cera regarding its revenues. In particular, the EAC asked the Supreme Court to annul the regulator’s decision to impose a permanent 8 per cent reduction in all basic tariffs. The EAC had argued at the time that the decision led to a reduction in its surpluses and the value of the organisation.
The EAC trade unions disagreed with the board and called on the administration to withdraw the appeal, which was eventually done.
Sotos Savva, head of the scientific personnel union (Sepaik), on Wednesday told state broadcaster CyBC that he had no prior knowledge of the EAC administrator’s decision to go against Cera.
Savva expressed frustration over the slow implementation of EAC RES infrastructure and storage capacity, and the lack of clarity over the fate of the polluting Dhekelia power plant and staffing.
Despite the stalled momentum the union head suggested that it “is not a matter of taking sides”.
“This is not a matter for the courts, this is a matter which should be resolved through meetings for the benefit of the customers,” the union head stated.
He noted that as far as the unions were concerned, current Energy Minister George Papanastasiou had expressed a strong sympathy for their concerns and had admitted to the mistakes of the past, including the dumping of blame for policy failures on the EAC.
“Communication bridges must be built between the minister and the board. Non-communication is not an option as matters are urgent,” he said.