New electricity tariffs and extra subsidy

Environment and Energy Minister Thodoros Skylakakis on Thursday announced a series of measures regulating the electricity market that aim to protect retail customers after the horizontal subsidies stop on January 1, 2024. There will also be a subsidy for up to some 1.2 million vulnerable consumers, he stated.

The minister said that a uniform tariff will be established, in addition to a heating subsidy for vulnerable consumers who use electricity to heat their homes and a special tariff for households with four or more children, along with measures to discourage strategic bad payers.

The new, uniform electricity tariff will be set at the start of each month on the basis of a mathematical formula decided by ministerial decree, along with the profit margin set by each supplier. The rate will change every month, at which time bills will be corrected upward or downward based on the change in previous prices and other factors included in the formula. The price will be final, with any discounts included in the tariff announced by each supplier.

All consumers will be automatically switched to the new uniform tariff except those with fixed-tariff contracts and those who specifically choose a different tariff, selecting one of the alternative products offered by suppliers. Skylakakis said that all consumers can switch to the uniform tariff, as changing suppliers will continue to be penalty-free.

“The fundamental weakness at present is that it is very difficult for consumers to decide which is the cheapest supplier. We are obliged to protect consumers,” Skylakakis explained.

Speaking at a press conference at the ministry, Skylakakis also announced state support for the most vulnerable consumers, whose number may reach 1.2 million. The total cost amounts to 120 million euros, with the financial support being €60 per month, equal to the heating allowance. The minimum amount per quarter will be €45, while it could reach up to €480. Applications will start next January and an extra 20% subsidy will apply for each dependent child.

“Those who heat with electricity are half of the consumers,” stressed the minister, adding that “we are giving emergency assistance to the more vulnerable. The government will apply the measure for the January-March quarter. There are 1.2 million potential beneficiaries, based on the number of days requiring heating.”