Electricity bills for most Greek consumers will go up 9 percent retroactively to Jan. 1, while a 100 percent property tax surcharge is still being tacked on to utility bills under the threat of power being disconnected, although state agencies that owe 170 million euros ($227 million) haven’t paid and have not lost their electricity.
The price hike comes at the insistence of Greece’s international lenders, and as the chairman of the Public Power Corporation, Arthouros Zervos, has asked Finance Minister Yiannis Stournaras to get state bodies to pay.
Central ministry agencies, local and regional authorities, the country’s biggest universities, central and regional hospitals and medical centers, academic foundations, virtually all municipal water companies, museums, sports and cultural centers are among the agencies who won’t pay their electric bills but whose power has not been cut off, the newspaper Kathimerini reported.
Meanwhile, thousands of Greek households are being disconnected every month even if people who have suffered pay cuts, tax hikes and slashed pensions can’t afford the bills for electricity and the doubled property tax.
The Energy Ministry said that the average total increase amounts to 8.6 to 9.2 percent for most households, while for commercial, agricultural and industrial consumers the increase amounts to 10-15 percent. That means that for most households the power bill will go up by about four to five euros per month.
The January increase on electricity rates amounts to 3 percent, but the burden on power bills will be around 9 percent due to the increase in charges for pollutants passed on from electricity producers to consumers, and to the rise in the levy for renewable energy sources’ development.
The government is expanding the application of the so-called social rates, meant to offer a discount to special groups in society. The social rate will now secure more consumers a 42 percent discount on regular prices. Further rate hikes are expected on May 1 and on July 1. July will also see the full liberalization of the electricity industry.
At the top of the list of state bodies that owe PPC money is the Interior Ministry, with a debt of 58.4 million euros ($78 million), including 38.9 million euros ($51.9 million) in municipal water and sewage companies’ unpaid bills.
The Development and Infrastructure Ministry has debts of 30 million euros ($40 million) owed by Attiko Metro, the Athens subway system. The Education Ministry owes 23.7 million euros ($31.6 million.) The ministry’s own list of debtors, besides its central agencies, contains a total of 62 bodies that have not paid for the electricity they have used.
This includes the country’s top universities, such as Thessaloniki’s Aristotle University, with debts of 5.5 million euros ($7.34 million) and major sports centers such as the Olympic Sports Center of Athens (OAKA), the centerpiece of the 2004 Athens Olympic Games, with debts of 4.3 million euros ($5.74 million) to PPC.
The total hike households could hit 15 percent this year so that PPC can cover costs for transmission rights, the government said as it was ordered by the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) Troika have the fees meet the costs of generating energy, Reuters reported..
The government said the new tariffs, which came into effect from Jan. 1, stemmed from PPC being required to spend 270 million euros ($360.6 million) for transmission rights this year. Depending on consumption, prices for Greek households – many of which are already struggling because of austerity measures imposed by the government – will go up by between 8 and 15 percent.
They come after a 9.2 percent average increase in prices last year. PPC is the dominant player in the Greek energy market, and the country’s EU and IMF lenders are pressing the government to make room for private companies. The company’s tariffs are regulated by the state.
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