ECONOMY

Smog discount planned for power use

Hundreds of thousands of electricity consumers in Greece are about to get significant discounts on their power consumption as the government is making plans to combat the use of wood-burning stoves and fireplaces and reduce the smog phenomenon in the country’s major cities.

Energy Minister Yiannis Maniatis submitted a number of proposals aimed at reducing smog during a meeting on Monday with Finance Minister Yannis Stournaras, his alternate Christos Staikouras and his deputy Giorgos Mavraganis, as well as Public Power Corporation Chief Executive Arthuros Zervos. Their final decisions will be announced in the coming days.

As a part of government efforts to make electrical heating devices more attractive than wood-burning stoves and fireplaces on cold days, the Energy Ministry has proposed a discount for consumers of up to 2,000 kilowatt/hours per four-month period, which covers the majority of average households. These discounts will apply each time a region issues a smog alert.

This discount is expected to come at an annual cost of about 50 million euros, although the precise amount remaina to be determined, as does the smog threshold that will trigger the state of alert. The cost will be covered by the 2013 budget’s primary surplus.

The government has also decided to freeze the expected hikes in electricity rates (resulting from an increase in the renewable energy sources – or RES – levy) for two months, a period during which the Energy Ministry will have to introduce new measures to cover the deficit of the Electricity Market Operator (LAGIE) and avoid major increases in all power rates.

In a last-minute decision on Monday, the ministry sent the Regulatory Authority for Energy (RAE) notification of the measures it intends to take to clear the LAGIE deficit and prevent the regulator from proceeding to the adjustment of the RES levy at the expense of consumers.

The RES plenary convened later on Monday and has reportedly found that the measures proposed are not specific enough, forcing RAE to postpone the RES levy adjustment for a couple of months. This allows the ministry some time to quantify its proposals and render them more precise.