The problem of ‘energy tourism’

Motivated not by the search for the cheapest kilowatt-hour, but by “escaping” their bills, the phenomenon of consumers moving from one retail electricity provider to another has been dubbed “energy tourism” by supply companies, and it has become the bane of the market.

Since last August, when the government introduced month-to-month electricity pricing and the opportunity for consumers to switch providers even if they haven’t paid off their bill, providers’ outstanding debts have doubled to 1 billion euros. About half of that, according to the market estimates which the general manager of Fysiko Aerio Elladas gas company, Ioannis Mitropoulos, conveyed on Thursday in a meeting with the press, was added from August 2022 to May 2023 and is a burden that has been shed consumers who abuse the right to switch providers.

Under the new pricing model, suppliers have no right to request a power cut for a customer who has switched providers without paying their bill, thereby accumulating debt. Although the Energy Ministry had entered the process of re-evaluating the measure through an institutional dialogue with the providers, the announcement of elections intervened and the discussions were interrupted.

In contrast to the energy tourists, the image conveyed by the market is that the majority of consumers prefer to pay their electricity bills and those who struggle ask for settlement arrangements. In fact, the tendency is for consumers to choose rates with a consistency discount because of the lower price, and seven out of 10 of them are fully consistent. However, despite the high subsidies, a proportion of consumers struggle to pay their bills on time, resulting in a total of €500 million in outstanding debt in the market, which companies manage through settlements.

However, Minister Kostas Skrekas had a surprise for suppliers on Thursday, as he pre-announced subsidies for electricity bills for both May and June, anticipating the evolution of prices. Therefore, although the de-escalation of natural gas rates continues and the market expects a drop in prices for June, the minister announced a subsidy corresponding to that of May – i.e. 1.5 cents/KWh – and a total for the two months amounting to some €47 million.