Decisions are expected to be made immediately Minister of Energy Theodoros Skylakakis so as to close the loophole of energy tourism, and solve it problem with due dates accumulated by those who switch companies leaving debts.
The possibility for the previous company from which the consumer leaves debts to request a disconnection from the DEDDIE is among the proposals of RAEEY included in its opinion to the minister.
In particular, this proposal among others will be presented at meeting that will take place today between RAEEY and the minister Theodoros Skylakakis, to be presented with the opinion of the Regulatory Authority, on the amendment of article 42 of the procurement code
This is also a priority of the political leadership of the Ministry of Foreign Affairs – so that the market acquires the necessary safety valves and puts a stop to the tactic of changing suppliers leaving debts.
Essentially, the need to close the “hole” in suppliers’ finances, which grows every year, as the current institutional framework allows this behavior to consumers.
According to market executives, non-performing loans have increased to 3% of turnover, from 1% that was before the emergency measures, a percentage that includes regulated charges, which have actually increased. If, however, these are removed and only the net charge for consumption remains, then the percentage in question is much higher.
Today the total overdue debts of consumers to the supply companies amount to 4.2 billion euros, of which it is estimated that 200 million euros were added in 2023.
Of these, 1/3 correspond to old unpaid PPC debts that cannot be repaid since they also include companies that have closed (Piraiki Patraiki), as well as LARCO…
Much of the rest was created after 2020 and the SC ruling that the principle of proportionality is not respected if unpaid bills prevent switching providers.
This decision put a brake on the intention of the Ministry of Foreign Affairs to stop energy tourism, and resulted in a steady increase in overdue consumer debts to suppliers.
Companies have tried in the last two years to deal with the problem, creating an “energy Teiresia”, but something that cannot be done without first changing the institutional framework.
The opinion of the Regulatory Authority concerns two measures:
- the flagging and
- the clippings.
What is flagging?
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Flagging is the notification to everyone about the existence of debts. In other words, the supply company to which the consumer leaves debts when he changes company will be able to inform the Thalis system to DEDDIE about his debts and the rest of the suppliers will also have access to this information.
Also, the debtor will be informed and will be able to settle his debts and prove that he is not a strategic defaulter.
The second measure proposed, which is also considered the most effective, is cut-offs. Will the supply company to which the departing customer leaves debts, if he, despite being informed, refuses to settle his debts, and is therefore considered a strategic defaulter, request that he be cut off from DEDDIE, even if he has moved to another company supply.
Source: Daily
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– What measures is the Greek government considering to tackle energy tourism and accumulated debts in the energy market?
Closing the Loophole of Energy Tourism: Minister of Energy to Make Key Decisions
The Greek energy market is on the verge of a significant overhaul as Minister of Energy Theodoros Skylakakis is expected to make crucial decisions to address the long-standing issue of energy tourism and accumulated debts. The Ministry of Energy is prioritizing the amendment of article 42 of the procurement code to prevent consumers from switching energy suppliers while leaving debts behind.
According to the Regulatory Authority for Energy and Water (RAEEY), the current institutional framework enables consumers to change suppliers without settling their outstanding debts, resulting in a significant financial burden on energy companies. This loophole has led to a staggering €4.2 billion in overdue consumer debts, with an estimated €200 million added in 2023 alone.
The RAEEY has proposed several measures to tackle this issue, including allowing previous energy companies to request a disconnection from the Hellenic Electricity Distribution Network Operator (DEDDIE) when a consumer switches suppliers without paying their debts. This would essentially prevent energy companies from being left with unpaid bills when consumers switch to a different supplier.
The Problem of Due Dates
One of the primary concerns is the accumulation of debts due to the problem with due dates, where consumers change suppliers before settling their outstanding bills. This behavior has led to a significant increase in non-performing loans, which now account for 3% of turnover, up from 1% before the emergency measures were implemented.
Market executives estimate that if regulated charges are removed and only the net charge for consumption remains, the percentage of non-performing loans would be even higher. The situation is further complicated by the fact that one-third of the outstanding debts correspond to old, unpaid PPC debts that cannot be repaid, including companies that have closed down.
The Need for Change
The Greek government recognizes the need to close the “hole” in suppliers’ finances, which has grown significantly over the years. The current institutional framework has allowed consumers to exploit the system, leaving energy companies with substantial debts.
To address this issue, the RAEEY has proposed two key measures:
- Flagging: This involves notifying all stakeholders about the existence of debts. The supply company to which the consumer leaves debts when changing companies will be able to inform the Thalis system to DEDDIE about the debts, and the rest of the suppliers will also have access to this information.
- Clippings: This refers to the physical disconnection of energy supply to consumers who fail to settle their debts.
Meeting with the Minister
Today, the RAEEY will present its opinion to Minister Theodoros Skylakakis, highlighting the need for urgent action to address the issue of energy tourism and accumulated debts. The meeting is expected to pave the way for a comprehensive overhaul of the energy market, ensuring that the necessary safety valves are put in place to prevent consumers from exploiting the system.
The Greek government is committed to creating a fair and transparent energy market, and the proposed changes are expected to have a significant impact on the industry. By closing the loophole of energy tourism and addressing the issue of accumulated debts, the government aims to create a more sustainable and equitable energy market for all stakeholders involved.
What impact does energy tourism have on the financial stability of Greek energy suppliers?
Tackling Energy Tourism: Greek Government Considers Measures to Address Accumulated Debts
The Minister of Energy, Theodoros Skylakakis, is expected to make immediate decisions to address the long-standing issue of energy tourism and the accumulated debts of consumers who switch energy companies, leaving debts behind. This problem has been plaguing the energy market, with non-performing loans increasing to 3% of turnover, from 1% before the emergency measures. The total overdue debts of consumers to supply companies have reached a staggering 4.2 billion euros, with 200 million euros added in 2023 alone.
The Problem of Energy Tourism
Energy tourism refers to the practice of consumers switching energy suppliers, leaving behind unpaid debts. This has created a significant financial burden on energy companies, which are struggling to recover these debts. The issue has been exacerbated by the current institutional framework, which allows consumers to switch suppliers without settling their outstanding debts.
Proposed Measures
To tackle this problem, the Regulatory Authority of Energy (RAEEY) has proposed several measures, including flagging and cut-offs. Flagging refers to the notification of all suppliers about the existence of debts owed by a consumer to a previous supplier. This would enable suppliers to access information about a consumer’s debt history and make informed decisions about providing energy services.
Cut-offs, on the other hand, would allow suppliers to request a disconnection from the Distribution Network Operator (DEDDIE) if a consumer leaves debts behind and refuses to settle them despite being informed. This measure is considered the most effective in addressing the issue of energy tourism and accumulated debts.
Meeting with the Minister
The RAEEY will present its proposals to Minister Skylakakis at a meeting today, with the aim of amending Article 42 of the Procurement Code. The minister is prioritizing the need to close the “hole” in suppliers’ finances, which grows every year due to the current institutional framework.
The Need for Reform
The Greek government recognizes the urgency of addressing this issue, which has led to a significant increase in overdue debts. Market executives estimate that one-third of these debts correspond to old unpaid PPC debts that cannot be repaid, as they include companies that have closed down. The remaining debts have accumulated since 2020, following a Supreme Court ruling that the principle of proportionality is not respected if unpaid bills prevent switching providers.
Way Forward
The government’s priority is to introduce measures that would prevent consumers from switching suppliers without settling their outstanding debts. By closing the loophole of energy tourism, the government aims to ensure that the energy market acquires the necessary safety valves and puts a stop to this tactic.
The proposed measures, including flagging and cut-offs, are expected to be implemented soon, providing a much-needed solution to the long-standing issue of accumulated debts in the energy market.
What is Flagging?
Flagging is the notification to all suppliers about the existence of debts owed by a consumer to a previous supplier. This enables suppliers to access information about a consumer’s debt history and make informed decisions about providing energy services.
What Measures is the Greek Government Considering to Tackle Energy Tourism and Accumulated Debts in the Energy Market?
The Greek government is considering several measures to tackle energy tourism and accumulated debts in the energy market, including:
Flagging: notification to all suppliers about the existence of debts owed by a consumer to a previous supplier
Cut-offs: allowing suppliers to request a disconnection from the Distribution Network Operator (DEDDIE) if a consumer leaves debts behind and refuses to settle them despite being informed
These measures aim to address the long-standing issue of energy tourism and accumulated debts, ensuring a more sustainable and equitable energy market.
