Cash-strapped energy firms
Suppliers have major liquidity problems due to low bill payment rate and subsidy delays
Electricity suppliers are under suffocating pressure due to delays in the payment of subsidies and even longer delays in the corresponding value-added tax, but also the side effects of the new pricing mechanism implemented to replace the adjustment clause, which in part concerns the free movement of consumers without any “filter” for those who have not paid off debts to the previous provider.
Providers are greatly concerned over this last issue, as the figures of the last few months show that 50% of consumers who switch providers are strategic defaulters. This is the phenomenon of “energy tourism” as the market calls it – i.e. the movement of consumers from one supplier to another, leaving behind successive debts from unpaid bills.
Through their association (ESPEN), the supply companies have proposed to the Energy Ministry the restoration of the possibility of interrupting the electricity supply from the previous provider in the event that the consumer has not paid two consecutive bills, while at the same time promoting the “energy blacklist” function that will highlight the cases of strategic defaulters from consumers who find it difficult to pay their bill and proceed to settle their debts.
Concerns are intensifying ahead of the winter season and high consumption, with providers estimating that arrears will soar if immediate action is not taken. The rate of growth in arrears, which had stabilized in recent months due to high subsidies, began to pick up in October, a development the market attributes to pressures on real household income from the broader inflation.
Providers also raised the issue of delays in the payment of subsidies, pointing out the pressure it puts on their liquidity. It was just in the previous days, according to ESPEN, that the September subsidies were paid, which means that the suppliers “were called for a long time to cover entirely through equity extremely high financial requirements – in terms of liquidity – for the granting of the state subsidies by the month in question.”
