Competitiveness is good – if it is real. With seven private company active in the energy sector, Greece’s Public Power Company (DEH) sees itself obliged to adjust to the new market conditions. As of 1. July 2016, PPC will grant 15% reduction to those private and business customers who pay their bills in time. The reduction refers to the bill part concerning the consumption of electricity only and before the Value added Tax and not to the total bill amount which contains taxes and fees to municipality, state broadcaster ERT and power distributions and others. A bad habit that normally doubles the bi-monthly bill.
In a bimonthly bill of €104
Electricity consumption is €36
V.A.T. 13% is €4.50 = total €40
fees, taxes etc are €44 depending on the municipality property tax.
The reduction will be granted also to those consumers with debts to PPC who however have made repayment settlements and pay regularly the installments. 450,000 PPC-subscribers have reportedly made arrangements to repay their outstanding debts and avoid power outage.
The PPC plans also second bonus to those who paid their bills on time in 2015: a reduction to the fixed charge which can be €13.94 in the four-month bill. I suppose the total gain for the 2015 bills will be 13.94 x 3 = €41.82
Already in April the PPC started to grant a 10% reduction to business subscribers who pay their bills in time.
The PPC targets to award its 5.500,000 subscribers and avoid seeing them escaping to the private companies that offer better prices and exclude the ‘fixed charge’ from the bill.
With the very recent new arrangements for outstanding debts (36 installments without down-payment) Greece’s Public Power Company tries to show its social face to the thousands of Greeks suffering under the economic crisis but also to get back €2.7 billion in outstanding debts.
PPC has still the lions share in the electricity market with 91,38 percent.
This is finally a good development and utility companies seem to come to their senses after 6 years of economic crisis.
Back in 2011 the PPC started to massively cut the electricity to thousands of households or businesses who were unable to pay their bills. A scandal for families with kids, elderly and chronic-ill who had to live in the darkness for days, weeks and some even for months. The repayment arrangements back then were also scandalous as the impoverished subscribers would have to decide: either eat or pay the electricity. The PPC introduced the “social tariff” for vulnerable groups of the society according to income and/or invalidity criteria.
PS with friends we are currently discuss whether it is worth to move to a private power provider. One of the friends got an offer to “pay €1 per day for the first 5 months of the new subscription.” She realized that she would have no real gain, that in fact she would pay more than for DEH. Another argued that “private providers would immediately cut the power if one bill is due.” A third claimed that also “DEH cuts the power if two bills are unpaid.” And a fourth said that she was warned that the Public Telecommunications company OTE would have her landline cut due to a bill of 35 euro she had failed to pay in time. “it doesn’t matter if in public or private company for utilities. Unpaid bills will cost you the power, the water or the phone,” she concluded.
So I suppose, private providers have to come back with better offers.
Considering that my estimated bills are fraudulent — deliberately inflating the figure by about 25-30% — it is impossible to pay the estimated bills without paying too much. So this return of 15% is meaningless, just another fraud.
A situation where any company whether public or private holds a monopoly over a service without proper oversight will lead to price fixing. If there are several private companies then there is the danger of cartels and price fixing. Even Adam Smith realized that and actually warned for that. Best way to drive prices down? Get off the grid and generate your own electricity with solar panels. But that is out of reach for many.