The landscape around him remains blurred electricity pricing method one and a half months before the expiration of the new model installed in August last year to replace the adjustment clause. The new monthly billing and 10-day advance billing model will expire on July 2nd. MINISTRY submit to the Commission a request for an extension until the end of 2023 and at the same time a request for an extension for the same period of the mechanism for recovering excess profits of electricity producers from the wholesale market (ceiling), which expires on June 30.

Brussels Based on the picture so far, they are said to be positive about the request for an extension of the ceiling on the wholesale market, although they believe that the de-escalation of prices has returned the market to normal. Moreover, they have already given the green light to the expansion of the known as “Iberian” model, which they exclusively approved last year for the Spanish and Portuguese markets, which the political leadership of the Ministry of Foreign Affairs evaluates as qualifications and for its attitude towards the Greek request . It should be noted that the wholesale market cap mechanism has been the main lifeblood of the Energy Transition Fund to fund electricity bills. From 1 July last year, when it came into force, until the first days of May 2023, it strengthened TEM with €3.255 billion in revenue.

On the contrary, the competent authorities in Brussels are very skeptical about the extension of the pricing model in the retail market. This became clear, according to the information, at the meetings he held in Athens. EU Energy Director General Ditte Juul-Jorgensen with the political leadership of the Ministry of Foreign Affairs, as well as with representatives of the electricity market in the context of its participation in the Delphi Forum. Both manufacturers and mainly suppliers through their association (ESPEN) have brought to Ms. Juul-Jorgensen’s attention the question of canceling the new pricing model, arguing that it significantly affects competition by adding distortions.
In contrast to the wholesale market capitalization mechanism, whose positive impact was not disputed, the new retail pricing model, from the first months of its implementation, confirmed the concerns expressed about the impact on prices, competition and consumer debt, which will abuse the opportunity to change. supplier per month that the Commission will take seriously the evaluation of the request for an extension of its application.

Is general conclusion that the new pricing model has led to the desired political end result, but with additional costs for the state and consumers but also significant risk for suppliers. Especially:

1. Monthly prices announced by suppliers since August, when the new pricing model was introduced, include the most extreme wholesale price forecasts, transferring high price forecasting risk to tariffs in an environment of high market volatility. This multiplied the cost that the adjustment clause would have passed on to the electricity bill, which of course went unnoticed by consumers as it was covered by generous subsidies. According to the data processed by K, which are based on official data from the Energy Exchange, ADMIE and DEDDIE, in the two months of September-October alone, the total cost of electricity for low voltage increased by 1.11 billion rubles. euros more than it would have been had he been invoiced with an adjustment clause.
2. High subsidies to cover inflated bills have created surpluses for suppliers and sent wrong signals of savings to consumers, a problem highlighted both by the OECD in its latest report and by the IEA in pointing out that it would be more efficient to support consumers through direct subsidies. and tax incentives.
   The undeniable receipt of excess revenues in the retail market forced the Minister of Environment and Energy, Kostas Skrekas, to first announce and then legislate their taxation in early October last year, which many interpreted as a public failure of the new model from the first months of its implementation.
3. The new pricing model was also combined with the ability for consumers to change service providers on a monthly basis. The arrangement has reinforced the phenomenon of “energy tourism” – that is, the movement of consumers from supplier to supplier, leaving unpaid bills – and, according to ESPEN, increased outstanding debt by 500 million euros from last August to May 2023. Minister Kostas Skrekas has also publicly acknowledged the issue, which he says he is looking into in collaboration with RAE and suppliers.
4. Consumer mobility has increased marginally and has been significantly limited among private providers as the tone for the new pricing model is set by contextual advertising, whose rates are the basis for calculating the monthly subsidy. According to DEDDIE, 555,000 consumers switched suppliers in 2021 and 588,000 in 2022, a total increase of 33,000. The structure of horizontal tariff regulation effectively abolishes competition and ultimately “punishes” the most competitive in the market.