Filenews 18 October 2023 - by Chrysanthos Manoli
"F" reports that EAC intends to appeal to the Administrative Court against the decision taken on September 15, 2023 by RAEK to reject the request of the Electricity Authority to increase the basic electricity tariffs by approximately 25%, in order to collect recoverable expenses previously approved by the Regulatory Authority.
The appeal to the Administrative Court will be made on the basis of Article 20 of the Law on the establishment and operation of CERA. Article 20 provides that "decisions, regulatory decisions and decrees issued by CERA shall be subject to judicial review, following an appeal that may be lodged with the Administrative Court, in accordance with the provisions of Article 146 of the Constitution of the Republic of Cyprus".
EAC had asked CERA in March 2023 to increase the basic tariffs by approximately 25% (EAC claims that the increase was a lower percentage), in order to recover the operating and other expenses it has incurred – with CERA's prior approval – for its operation and expenses it will make in the coming period, in the context of implementing its development programs that were also approved by the Energy Regulator.
The rejection of EAC's request took place after about seven months from its submission, as it was preceded by intense concern by the Regulatory Authority but also intense backstage, with the involvement of the Ministry of Energy, which, according to Phileleftheros information, favoured the withdrawal of EAC's request, due to the previous large increase in electricity costs and the reactions that would be caused to consumers by a possible new increase of 25% in the price of basic tariffs.
The rationale
It is important to mention - and it will probably be used by EAC's lawyers before the Administrative Court -that in its negative decision CERA does not invoke incorrect calculations or unfounded claims on the part of EAC, but the extraordinary economic conditions that prevail and the public interest.
Specifically, CERA's decision states that "persistently high energy prices are having an increasingly negative impact on citizens and businesses (and) CERA's concern and duty is to protect consumers against monopoly prices, (and) given the extraordinary circumstances and the economic impact of the current crisis on the global economy, which directly affect Cypriot consumers, It is considered that it is in the public interest to keep in force for the year 2023 the tariffs of the year 2022 (which had increased by 14% compared to those of 2021)".
EAC's reaction
On September 21, in a statement to Phileleftheros, EAC President Despina Theodosiou had stated that "the continued deprivation of funds from EAC, which CERA's decision estimates lost income totalling €107 million, leads to short-term and long-term risks, such as the implementation of its approved development plan".
Theodosiou had added that "CERA's decision is respected, but within the framework of the responsibilities of the Board of Directors and taking into account the objectives of the organization, the Board of Directors decided to conduct a technical and economic analysis of the impact of the decision, in order to determine the next actions of the organization, for the benefit of consumers and ensuring the viability of EAC."
Obviously, through the analysis made by EAC technocrats and its legal advisors, it was decided to file an appeal with the Administrative Court for the annulment of CERA's decision, something that EAC considers important, in order, among other things, not to create a precedent for the rejection of requests for recovery of its approved expenses through basic tariffs.
He also appealed in '14 for tariffs
The Electricity Authority of Cyprus had also appealed in March 2014 against CERA's decision concerning its revenues. In particular, he asked the Supreme Court to annul the Regulator's decision to impose "a permanent 8% reduction on all basic tariffs". EAC had argued at the time that the decision led to a reduction in its surpluses and the value of the organisation.
It is noteworthy that the EAC trade unions had disagreed with the decision of the board. In a statement, they called on the administration to withdraw the appeal "and for any decisions to be taken in the best interests of the consumer."
That appeal was withdrawn after a long time.
