Legitimacy of Greece’s energy regulator questioned

Electricity power plant. Kozani, Greece. [Lisa Murray/Flickr]

The legitimacy of the selection process of Greece’s Regulatory Authority for Energy (RAE) executive board has been questioned, according to media reports in Athens.

The Syriza-led government has been severely criticized over its alleged efforts to take control of the country’s independent authorities.

Greek government accused of targeting independent authorities

The Syriza-led government is under attack over its alleged efforts to take control of country’s independent authorities.

One of them is the Regulatory Authority for Energy (RAE), which regulates Greece’s energy market.

Questions over the selection process

A report published in the Proto Thema journal this weekend suggested that the legitimacy of the selection of RAE’s executive board has been put in question.

The report notes that the RAE’s president and vice president should have secured an absolute majority of those present in the parliamentary committee, which reportedly hasn’t been the case.

The two incumbent holders of this position were elected in RAE’s board in 2015 when far-left hardliner Panagiotis Lafazanis was Greece’s energy minister.

After the break-up of Syriza, Lafazanis established his own leftist Popular Unity party, which did not succeed in entering the Greek parliament.

According to article 39 of the Greek leigslature’s regulations, “committees decide by an absolute majority of those present”.

But in practice, in this case, no absolute majority was formed as eight lawmakers voted in favor of them, seven against and two abstained.

The lack of the required absolute majority was also signaled in a letter by the then-chairwoman of the parliament, leftist MP Zoi Konstantopoulou.

The composition of the Energy Regulatory Authority could, therefore, be challenged as to its validity, putting into question the proper functioning of the energy market regulated by the specific independent authority.

Government’s reaction

The government says, though, that the process was “totally legal”.

Contacted by EURACTIV, an energy ministry spokesperson said that all of the necessary procedures had been followed in the parliamentary committee for the selection of RAE’s president and vice president.

The spokesperson was however evasive as to the specific details, as the case is being examined by the ministry’s legal department, and underlined that it was a matter of interpretation.

The spokesperson also told EURACTIV that that the press publication should be attributed to “general pressures against RAE”.

Greece’s energy market is a state monopoly, and successive governments have failed to liberalize it, despite the country’s commitments under the international bailout programmes.

Greek energy market hindered by lack of competition

Greece’s geographical position could help it become an EU energy hub. But state monopolies are holding the country back, according to a Commission report. EURACTIV Greece reports.

This lack of competition, according to the European Commission, has held the country back preventing it from unlocking its high energy potential. In this context, Brussels insists that the existence of an independent and fully functional energy authority is more than necessary for the market.

Commission Vice-President for the Energy Union Maroš Šefčovič is going to Greece on 10 March. In a recent interview for EURACTIV, he said he said he would assess the country-specific recommendation to Greece jointly with his hosts.

The country-specific recommendations signify that new legislation has enhanced the independent role of the Regulator. It adds: “To allow it to exert its role to the full and support the implementation  of significant market reforms, the current staffing  issues  of  the  regulator  should  be  swiftly  addressed.”

Greece’s electricity company Public Power Corporation S.A. (PPC), in which the state holds 51% of the shares, enjoys the status of a monopoly on the Greek electricity market.

Greece is a net power importer, and imported 3.3% of its electricity need from Turkey, and 3.1% from the Former Yugoslav Republic of Macedonia (FYROM). The country is connected to all of its neighbors, including Italy (with a high voltage subsea DC link).

Greece’s state electricity supplier unilaterally imposes its tariffs on Greece's energy intensive industry, resulting in unbearable and unpredicted costs for Greek businesses.

The European Commission insists PPC should negotiate its tariffs and not impose them unilaterally.

>>Read the Links Dossier: The energy conundrum in Bulgaria and Greece

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