Government grappling with electricity rate hike conundrum

Competent government officials are in search of at least 100 million euros in resources for the protection of vulnerable households from the high electricity rates expected over the coming months.

Since last Thursday’s cabinet meeting, when the prime minister asked ministers to propose support measures, a round of contacts for finding the necessary resources has begun.

After rejecting the use of funds from the renewable energy sources account manager, the Energy Ministry has decided to tap emissions rights auctions, which thanks to the increase in the price of carbon emissions (and despite the drop in quantities) are expected to have revenues of about €1 billion by the end of this year.

Therefore the government has chosen to draw a minimum of €100 million from that and then to decide on the redistribution of the auction mechanism’s resources, a process determined every year by the ministry.

Another tough exercise will be how to distribute that €100 million, with officials trying to calculate whether there is also a margin for the reduction of electricity rates for households included in the Social Domestic Rates system.