Seeking to put an end to the spiral of outstanding debts in the electricity market, the government appears determined to prevent the very real threat of companies in the sector declaring bankruptcy and the disruption this could cause in the midst of an energy crisis.
Indicatively, at the order of the Environment and Energy Minister Kostas Skrekas, the Regulatory Authority for Energy (RAE) has invited the companies that have unpaid debts to the Independent Power Transmission Operator (ADMIE), Hellenic Electricity Distribution Network Operator (DEDDIE), the Renewable Energy Sources Operator & Guarantees of Origin (DAPEEP) and municipalities to a hearing next week during which they will be issued a repayment ultimatum with the threat of putting them out of business.
One example which is indicative of the vicious cycle created is that power suppliers are not forwarding the cash received through electricity bills that takes the form of council tax to the municipal authorities.
That means local authorities are finding it hard to pay for street lighting and water supply. Furthermore, the suppliers are also not meeting their obligations to electrical energy producers.
Although by October 2020 the total outstanding debts from five companies in the sector had reached 350 million euros, the competent authorities, recognizing the pressures on their finances from the energy crisis that broke out last summer, did not activate specific legislation to penalize them, and instead opted to impose fines, while giving them the chance to settle their debts via a repayment scheme subject to the deposit of a letter of guarantee for 50% of what they owed.
The accumulation of outstanding debts continued after October for most companies in the industry, in tandem with high energy prices in the wholesale market.