Wholesale power rate cap to providers goes into effect

A ministerial decision that caps wholesale electricity prices charged by power producers to power providers, with different rates depending on the technology used, was published on Thursday.

This is the cornerstone of the government’s policy for containing retail prices paid by consumers.

Under the mechanism, the revenues that arise based on the difference between the cap and the daily prices on the energy exchange will be directed to the Energy Transition Fund in order to finance the subsidies of household and business electricity bills.

Suppliers are also required to announced the prices they will charge each month at least two months before they start to apply.

When the mechanism first goes into operation on July 10, the prices that will apply in August will be announced, while the rates for September will be announced on July 31.

The rates announced are expected to be high because they will not include the subsidies that providers had offered their clients up until now.

The final prices for consumers will be significantly lower, however, once the state subsidies per kilowatt-hours are also factored in.