Russian bank stays in Cyprus

UNDER pressure from both the government and parliament, the Electricity Authority of Cyprus said yesterday it would suspend charging consumers an extra charge on overdue bills.

The decision to drop the charge was taken at a meeting of the EAC's board of directors. The EAC said actual implementation pended approval from the energy regulator - although that's considered a formality.

"The Board of Directors, responding to appeals by the House Commerce Committee, has decided to ask for the Cyprus Energy Regulatory Authority's approval to suspend the measure, and to recoup the loss of earnings which this suspension entails at a subsequent date," the EAC said in a press release.

The power utility had introduced the new tariff, citing cash-flow problems caused in the wake of the Mari disaster of last July. It would charge an interest of 5.0 per cent on an annual basis, applied to the number of days an electric bill was overdue.

The tariff is calculated with the following formula: capital (amount due) multiplied by 0.05, multiplied by the number of days overdue, divided by 365.

For example, a seven-day delay in settling a €200 bill would work out to an extra charge of: 200 x 0.05 x 7 / 365 = 19 cents.

In addition, the EAC would charge customers who fell behind with their payments a fixed administrative fee of €5 per bill. This would apply to consumers receiving their statement every two months; for consumers getting their bill once a month, the fixed fee was set at €10.

Earlier in the day, the House Commerce Committee had warned the EAC it would take "steps" unless the power utility scrapped the latest tariff.

DISY MP Lefteris Christoforou, who chairs the committee, even issued the EAC an ultimatum: "We shall give the EAC a timeframe of one week to suspend this measure. Unless the decision [for the tariff] is not suspended today, we shall take steps geared at protecting the Cypriot consumer," he said.

Lawmakers dangled the stick, pointing out that the Commerce Minister has the power to order the energy regulator to instruct the EAC not to cut power to financially vulnerable groups, such as pensioners, large families and people on welfare.

This comes under a law which allows the Commerce Minister to issue decrees guaranteeing the uninterrupted provision of public utility services.

AKEL MP Yiannos Lamaaris put forward a middle-of-the-road proposal, suggesting that a decision to stop levying the tariff should apply only to financially needy groups and not to the whole population.

At the same session, the EAC's vice-chairman Giorgos Pistendis promised to convey the legislators' request to the organisation's board of directors that was scheduled to meet some hours later.

Pistendis nevertheless defended the EAC's initial decision to levy the tariff.

"We feel that this measure is more people-friendly than having the EAC cut off power [to consumers who do not pay on time]," he told MPs.

Pistendis said the extra charge was infinitesimal, amounting to just 3 cents per day on a €200 bill.

Meanwhile other public utilities like sewage and water boards were charging up to 40 cents for even a day's delay, he said, adding that the whole issue of the EAC tariff had been blown out of proportion.

In real terms, the extra charge may have been very small, but it proved extremely unpopular coming at a time of peak electricity consumption and also hot on the heels of a 1.5 per cent hike in electricity rates.

Source: Cyprus-Mail 

By Elias Hazou

Published on February 8, 2012 


|||EAC backs down on late payment levy

Show more
Show less

Popular Practices

© Accountants in Cyprus. All Rights Reserved. Terms & Conditions