Filenews 4 September 2024 - by Chrysanthos Manoli
The Council of Ministers may be called upon today to approve Energy Minister George Papanastasiou's proposal for a decision regarding the financing of the electricity interconnection operator with €125 million at the construction stage.
Although yesterday's information confirmed that the matter would be closed today at the Ministerial level, newer information indicates that the decision may be postponed until tomorrow or Friday, as it is quite possible that not all documents will be available to members of the Government in time today.
The agreement in principle reached on Monday already has the consent of the President of the Republic and no surprises are expected in the Cabinet.
However, there is interest in reservations or objections that may be expressed by some ministers, with attention focused on the Minister of Finance, who at times expressed concern about some economic parameters of the interconnection, which, however, are more related to the participation of the state in the investment scheme that will promote the interconnection, rather than to the final content of the regulatory framework. which, in any case, was largely fixed - and binding - long ago. And from the outset, it provided for consumers to bear all the costs.
However, because the agreement reached on Monday includes an obligation for the state to indirectly grant the Great Sea Interconnector €25 million next year, until 2029, some of which will come from pollutant actions.
What does the formula provide?
According to Fileleftheros, the formula agreed between the two parties, at the instigation of the EU Directorate General for Energy (which openly supported almost all of IPTO's requests, fearing its own political cost in case of a second fiasco for the same project within 11 months), provides that CERA will charge network charges per kilowatt hour to electricity consumers for the €25 million. euros agreed to be paid annually by the State to the interconnection operator. At the same time, however, based on the decision that is expected to be approved, the Government will grant a discount to consumers (in the form of an electricity subsidy), in such a way that the same electricity bill will show the charge of the fee for the interconnection and the equal deduction through state sponsorship. This formula was adopted to overcome any objections to State aid to the Great Sea Interconnector.
Immediately afterwards, CERA
After receiving its decision, CERA will be informed in writing, which will formally invoke the provision of the legislation stipulating that the regulatory authority takes into account for its decisions the policies of the Government and will approve amendments to the regulatory decision of July 2, 2024.
The much-discussed provision for the start of charging consumers for interconnection purposes after the operation of the project will be removed and wording will be incorporated that will express the formula agreed between the two governments, the EU and IPTO, with the participation of CERA.
Also, the paragraphs of the regulatory decision referring to the weighted average cost of capital (return on capital to the investor) will be amended so that the preferential rate of return (premium wacc) will result at 8.3% for 17 years, instead of 12 years provided for in the existing decision.
The paragraph on the financial security of the implementing body in case of geopolitical impediment will not be amended, but information is growing that soon the Greek Government and IPTO will come back to amend it as well.
With or without parliamentary approval?
Pending the decision of the Council of Ministers, which will shed light on some less understood aspects of Monday's agreement, there is a lack of adequate information on the procedures by which part of the revenues from the auctioning of greenhouse gas emission allowances will end up in ADMIE, from 2025 to 2029.
According to the law governing the allocation of revenues from pollutants, any expenditure must be included in the budget and approved by Parliament. However, it is not certain whether a budget will need to be submitted now or next for the 2025 tranche (which would give Parliament the right to vote against it, given the objections of several Members), since, as has been mentioned informally, there are already funds approved, totalling €50 million (not from the Emissions Fund, but from the Recovery Fund), for the purposes of electricity interconnection, without any other information.
The issue, which is being discussed between parliamentarians, who also approached the Audit Office, will be clarified within the day.
