Filenews 19 April 2024 - by Chrysanthos Manoli
ADMIE exerts unbearable pressure on the Cyprus Energy Regulatory Authority (CERA) and the Greek Regulatory Authority to quickly complete the procedures, complete the regulatory decisions and start charging electricity consumers in Cyprus and Greece with a proportion of their bills, so that the Greek Operator has revenue to pay Nexans for the cable it manufactures against a contract worth a total of €1.4 billion.
ADMIE, in a new letter to the two regulatory authorities, with notification to ministries and other authorities, stresses again that the construction of the project has started on January 1, 2024 and from that date it considers that the recovery of its costs from consumers should begin.
Through this letter, ADMIE states that it will prepare itself the regulatory framework for the recovery of costs, which is the responsibility of the regulators in Cyprus and Greece, will send it "by April 19, 2024" to CERA and RAAEY and demands that they immediately approve the framework that will be submitted to them!
However, the regulatory framework for the recovery of costs by the implementing body is ready as of 2023 as far as CERA is concerned. We understand that no similar regulatory framework has been made public by the Greek Regulator (RAAEY) and therefore there is no common regulatory framework of the two Regulators.
Phileleftheros reports that it is considered unthinkable by the Cypriot authorities for IPTO to submit its "own" regulatory framework and expect this to be accepted, for the sake of speeding up the procedures it requests.
In the same letter, ADMIE indirectly charges regulators with a deliberate delay in removing "other regulatory pending", which, according to the Greek Operator, they did not demonstrate when the promoter was EuroAsia Interconnector.
Specifically, IPTO states: "We ask for the immediate approval of the plan that will be submitted to you, as well as the immediate settlement of the other regulatory pending issues, with the same haste and diligence that your Authorities had shown until the summer of 2023, when the project was still in the hands of the outgoing Implementing Body, and as every Authority must under European legislation and the TEN-E Regulation, in order to avoid further burdening the project, especially taking into account the fact that taking all necessary regulatory decisions is crucial and is a prerequisite for the further disbursement of funds by IPTO to the project contractors".
The conclusion of the letter states: "Further delay may have a significant impact on the progress of the project as currently planned, as it exposes the project to price adjustments, suspension of the progress of the cable production process and uncertainty regarding the rescheduling of production and installation time."
Awaiting study
The Cypriot government has finally passed the position that it will not take a decision to participate in the share capital of the Great Sea Interconnector unless ADMIE submits an updated cost-benefit analysis for the project and if it does not complete other studies it wishes. However, the implementation of the CBCA and the regulatory framework for the calculation of costs and their recovery from electricity consumers is irrelevant to the participation or not of the Cypriot State in the investment.
The characterization of the project as of common interest, its regulation by CERA and RAAEY, in order to recover the cost of the Implementing Body from the construction stage are not issues that require decisions. The crucial decisions were taken years ago by the European Commission and the two regulators, with the consent and assistance of both governments.
However, the question arises whether the final decisions of the two regulators on the timing of the start of the flow of revenues from network users to the Implementing Body can be taken before the submission and evaluation of the updated cost-benefit study and, above all, whether an amendment to the regulatory decisions regarding the allocation of costs to consumers in Cyprus (63%) and Greece (37%) will be promoted if the data from the new analysis are judged to be different of those taken into account in 2017 and 2023.
