Cypriot consumers will have to be patient. The issue of a possible increase in electricity tariffs is up in the air once again.
According to reports, the Cyprus Energy Regulatory Authority (CERA) will need two weeks to analyze the submitted data, after which a final decision is expected.
During parliamentary hearings, Yorgos Petrou, the head of the Cyprus Electricity Authority (EAC), confirmed that the agency initially proposed a 7.5% increase in tariffs. However, this proposal was revised after President Nicos Christodoulides intervened, reducing the rate to 3%.
The initial proposal's breakdown was as follows:
- 5% to compensate for costs incurred in 2023;
- 2.5% — projected costs for 2025.
However, 2024 was left out of the equation. Petrou explained that the accounts for this period had not yet been fully audited. Therefore, the data was excluded from the calculations.
In turn, CERA head Polivios Lemonaris noted that the decision to raise tariffs should be objective and based on actual costs. He also stressed that if the approved increase is 3%, the final increase in consumers' bills will be 3.27%, including the 9% VAT.
Interestingly, consideration of the 2024 increase will most likely be postponed until 2026, which could create a temporary "gap" in the logic of tariff revisions.
Despite talk of price increases, EAC posted a net profit of €36 million (after tax) in 2023. Data for 2024 has not yet been published.
However, it is important to understand that, as a regulated entity, EAC is entitled to a "legal profit margin" of 4.66%. This means a certain level of income for the company is built into the tariff models and taken into account when assessing applications for electricity price increases.
According to the provided information, 88% of EAC's operating expenses from 2022 to 2024 were allocated to fuel and CO2 emission allowances.
This is one of the key factors explaining the company's financial pressure. Regulators have emphasized that only actual expenses are considered. These include equipment already in operation and completed projects.
The final decision is just around the corner. Within the next two weeks, CERA will either approve the increase or propose an alternative. For now, Cyprus residents can only hope that the possible tariff increase won't be too hard on their wallets.