EPEN letter to RAAYY on the cost of rheumatic theft

ESPEN sent to RAAEF on his recommendation for the Allowable Revenue of the 2nd Distribution Regulatory Period 2025-2028, as part of the relevant Public Consultation. In its letter, the ESPEN points out that from the role of the Administrator, as explicitly defined in the relevant legal and regulatory framework, it is quite clear that the management and treatment of the losses of the Network is primarily the responsibility of HEDNO SA. Therefore, the following placement of HEDNO S.A. in the relevant file of the operator’s recommendation in consultation cannot be accepted: “The average Network loss factor has gradually increased to high levels in recent years due to factors not in the Administrator’s control sphere”. ADVERSION ‘In addition, we note that despite its predictions no. 1431/22.10.2020 RAE Decision, the cost of losses was not incorporated into the Administrator’s Allowable Revenue but instead, under the number E-158/27.06.2024 RAAY Decision, the relevant provision of the Administrator’s Methodology of Calculation of Permitted and Required Revenue was revised, on the grounds that conditions are not mature enough to integrate the costs of losses into the Administrator’s Allowed Revenue. However, this makes Greece one of the least Member States of the EU (including Ireland, Italy and Portugal), where the cost of the network’s losses is not recovered through the Manager’s Permitted Revenue, but is passed on to the procurement costs, with the obvious consequence of the lack of sufficient incentive of the Administrator to reduce losses, as confirmed in recent CEER studies. In this context, our Association points out that at least, in the context of the approval of the Allowable Revenue of the EDP for the 2nd Regulatory Period (2025 – 2028), the individual parameters of the Loss Movement should provide strong incentives (in the form of sanctions and/or rewards) to the Administrator, both to restore losses to previous levels and to further reduce them, since the increasing level of losses ends up burdening all consumers with additional costs of hundreds of millions of euros each year. TRANSPARENCY The baseline value of the reference losses, i.e. the ‘acceptable’ level of losses, the cost of which is recovered from the electricity market in general (i.e. from the supply and/or directly from consumers through the CRS) should: (a) either be determined on the basis of a reasonable level of losses as derived from the distribution networks of the other EU Member States (benchmark), or (b) be maintained stable at the level corresponding to the parameters of the loss incentive of the previous Regulatory Period (2021-2024), i.e. at a level clearly below 10,0%. The rate of annual reduction of d(lfref) reference losses, as well as the factor for regulating the power of the incentive (sf), should be taken at prices close to the maximum of 5,0% and 100% respectively, as set out in RAE Decision No 1432/22.10.2020. The unit cost of reference of energy losses in the interconnected system (LIRref) should be calculated on the basis of data of a period of at least three (3) years, in proportion to the number 632/2021 RAE Decision. In addition, the calculation of the reference costs should include the total of the BALANCE SHEET Accounts (PP 1-3) of the Balance Sheet, in accordance with the Motility Regulation to limit losses in the EDP (RAE Decision 1432/2020).’; His entire letter