EAC may hike bills by 25 per cent

The Electricity Authority of Cyprus (EAC) may end up hiking its rates by up to 25 per cent should it win an ongoing case in court, MPs heard on Monday.

Andreas Poulikkas, head of the energy regulatory authority (Cera) said that recently the EAC filed a new request to raise the rate it charges per kilowatt-hour.

This increase, he explained, is substantially lower than the increase the EAC had requested last year – which would have seen the kilowatt-hour rate jump by 25 per cent.

Cera had rejected that request, so the state-run power utility has since filed a separate request. But in the meantime, the EAC has challenged in court the rejection of its prior request for a 25 per cent hike.

If the EAC wins the court case, it will be able to jack up its rate by 25 per cent.

Poulikkas was speaking at the House finance committee, reviewing Cera’s budget for 2024.

Regarding the cost of greenhouse gas allowances that drive up the cost of electricity, the official said that right now the allowances go for around €70 to €90 per tonne of emissions. But they’re expected to gradually become more expensive up until the year 2030.

Poulikkas cited forecasts that the allowances might end up costing €200 per tonne.

Taking MPs’ questions, he said he supports the idea of taxing energy companies’ windfall profits.

On storage for renewables, the official said that to date Cera has licensed storage systems for approximately 200 megawatts.

Lawmakers also discussed a government bill for tax rebates on capital expenditures that have to do with retrofitting and energy-saving. The plan concerns the tax years 2023-2025.

Regarding upgrades to the energy performance of buildings, the bill provides for tax rebates of seven per cent – up from three per cent currently. Amortisation – or the write-off of the expenditures – will occur in 14 years, instead of 30.

For investments in machinery and equipment connected to renewables systems, as well as systems that improve energy efficiency, the rebates offered will be 20 per cent – up from 10 per cent now. These include thermal insulation of water pipes, heat recovery systems, solar panels and the purchase of storage batteries. Amortisation will take place within five years instead of the ten that apply under current schemes.

And for capital expenditures on new electric vehicles (commercial use) as well as taxis and buses, the bill provides for tax rebates of 25 per cent – compared to the current 20 per cent.

These incentives, the finance ministry believes, are expected to drive down the operating costs of businesses i the short and long terms, also contributing to Cyprus achieving its ‘green’ targets.