NICOSIA – A significant legislative proposal poised to grant the state-owned telecommunications giant, Cyta, a foothold in Cyprus's energy sector has ignited a robust parliamentary debate, drawing sharp criticism from key industry stakeholders. The Electricity Market Association, through its president Giorgos Chrysochos, has voiced staunch opposition, citing concerns over potential unfair competition and the inherent advantages a dominant state entity might leverage. Concurrently, the Regulatory Authority for Energy (RAEК) has flagged potential legal complexities and market distortions, underscoring the need for meticulous examination of any proposed collaborations involving the Electricity Authority of Cyprus (ATHK), which currently holds a commanding position in electricity generation and distribution.
The proposed legislation, currently under deliberation by a parliamentary committee, seeks to redefine Cyta's operational scope, potentially enabling it to participate in the nation's electricity market. This move, however, has been met with considerable apprehension. In a statement released yesterday, the Electricity Market Association articulated its reservations, with its president, Giorgos Chrysochos, making his opposition unequivocally clear through public pronouncements. Chrysochos argued that Cyta’s established dominance in the telecommunications arena would inevitably confer an undue advantage should it venture into energy provision. He posited that such a scenario would preclude fair competition for existing private electricity producers, lamenting the detrimental impact of state monopolies, which he described as a "curse" upon the market.
The regulatory body, RAEК, has also weighed in with a formal letter to the economic committee, highlighting critical considerations for the burgeoning legislative framework. A primary concern revolves around the Electricity Authority of Cyprus (ATHK). RAEК pointed out that ATHK’s entrenched position in electricity production and supply means any partnership it might forge with another entity, including a potential entrant like Cyta, could introduce significant market imbalances. Consequently, the legality of such arrangements would necessitate thorough investigation. Furthermore, RAEК emphasised that ATHK's participation in any energy-related activities beyond its current remit must strictly adhere to established market operation frameworks and be underpinned by the acquisition of requisite operational licences.
RAEК’s stance also underscores the importance of broader consultation, noting that the perspectives of relevant state departments and bodies, specifically the Environmental Authority (EPA) and the General Directorate of Energy and Industrial Enterprises (GERIET), are indispensable when addressing the potential activities of a semi-state organisation like Cyta. The parliamentary discussion is ongoing, with a continuation scheduled for next Monday, indicating that the legislative process is still in its nascent stages.
The underlying rationale for Cyta’s potential foray into the energy sector, as suggested by legislative mandates, is to serve the public interest and enhance consumer welfare. This contrasts with the profit-maximisation objectives typically pursued by private enterprises. The anticipation is that Cyta's entry, once the bill receives parliamentary approval and subsequent licensing from RAEК, could herald a new era of competition, potentially benefiting consumers. However, the prevailing sentiment among some industry observers and associations is one of caution, urging a balanced approach that safeguards market integrity and fosters a truly equitable competitive environment. The coming weeks promise further clarity as parliamentary deliberations progress and regulatory bodies meticulously assess the ramifications of this ambitious proposal.