EU funds in doubt over EAC smart meter delay

The electricity authority (EAC) has been left in the lurch and smart meter installation has again fallen into a state of limbo, after the administrative court’s decision to forbid the telecommunications authority (Cyta) from being awarded the tender to install smart meters.

Speaking on Wednesday, director of the EAC board Giorgos Petrou, told state broadcaster CyBC that the EAC had been caught off guard by the decision.

Despite numerous delays, warnings by the state auditor that the legality of the tender to Cyta was in question, and the upholding of the contract by the tenders’ review authority earlier in the month, the EAC is now faced with no other course of action than to appeal to the Supreme Court over the matter and request an extension from the EU, Petrou said.

Meanwhile, an amount of €35 million earmarked for the installation of smart meters on the island from the EU’s recovery and resilience funds (RRF), hangs in the balance with fears that the EAC may lose this revenue, dumping ensuing costs on the public.

According to the commitments of the Republic towards the EU for use of RRF, the deal with the supplier of the 400,000 smart meters had to be finalised by end of March 2024, with the contract signed.

By September the EAC was to have received 50,000 meters and installed 15,000. By June 2026 all 400,000 meters were to have been received and 250,000 installations completed.

Offering a partial explanation for how the EAC got into its current position, Petrou noted that Cyta had been the only company able to offer the correctly prescribed meters, and that the competing bidders had failed in their bids for this reason.

The tender had attracted interest from three companies, with Cyta submitting the most expensive offer. However, the EAC board had deemed this proposal the most suitable.

The companies which lost the bids limited their objection in court to the fact that Cyta as a telecommunications company could not legally be in the running as a smart meter provider, according to Petrou.

“We are taking two actions now, we are proceeding immediately with an appeal to the Supreme Court, which unfortunately takes time, and we are proceeding to request an extension from the European Commission,” Petrou said.

According to the director, the EAC’s lawyers have suggested a court outcome could be possible within six months.

“We are very troubled by this development and were not expecting this since the [tender] review authority had upheld the contract [with Cyta],” Petrou said.

The situation deals a blow to the EAC’s chances of remaining competitive once the energy market opens, the director said.

He added that “other options” were being explored as Cyprus could not be left without smart meters, and that the EAC as well as Cyta were also examining legal aspects of the situation.

Asked what all this entails for the consumer, the EAC director noted that problems with functionality will not occur but neither the EAC nor the consumer will have visibility of their electricity usage and be able to regulate it.

In practical terms, among other things, this means households will be unable adjust their usage to times when tariffs are low, and EAC staff will still be required to physically do their rounds for meter readings, all of which quashes the authority’s oft proclaimed goal of lowering energy costs.