A payment collection system that has been in place on Greek electricity bills for nearly half a century is heading for abolition. The government is moving to separate municipal fees from electricity bills, paving the way for a broader overhaul of utility bills, which for decades have served not only as payment for electricity consumption but also as a collection mechanism for taxes and third-party charges.

The reform aligns with the European Union’s push for “clean” energy bills, although its implementation has been postponed until 2028, highlighting both the technical complexity of creating a new collection mechanism and the strong concerns of local authorities over potential revenue losses.

Interior Minister Theodoros Livanios announced on Thursday (June 26) that, from January 1, 2028, municipal fees will no longer be collected through electricity bills. Instead, they will be paid through a separate mechanism, to be established by Presidential Decree. According to the ministry’s plans, the new system will resemble Greece’s ENFIA property tax model, featuring annual assessments and the option to pay in 12 monthly installments.

The reform has long been requested by both electricity suppliers and the wider energy market, as electricity bills have evolved into complex collection instruments in which the actual cost of electricity now represents only part of the total amount consumers pay.

However, the government’s decision to delay implementation until 2028 reflects the significant technical and political challenges involved. On one hand, authorities must develop an integrated digital system linking municipalities with relevant government agencies to ensure accurate assessment and collection of fees. On the other, municipalities currently enjoy high collection rates precisely because these charges are embedded in electricity bills.

Market analysts note that delaying implementation until after 2027 also keeps this politically sensitive reform outside the next electoral cycle, avoiding immediate tensions with local governments while postponing the debate over how municipalities will safeguard revenues once the current collection mechanism is abolished.

An electricity bill that no longer reflects only electricity

The debate over municipal fees has once again highlighted a longstanding issue in Greece’s electricity market: consumers’ electricity bills no longer reflect solely the cost of the electricity they consume.

In addition to electricity supply charges, bills include regulated transmission and distribution network fees, Public Service Obligations (PSOs), the ETMEAR renewable energy levy, municipal fees, municipal taxes, the ERT public broadcasting fee, VAT, and various other charges.

As a result, the actual cost of electricity often accounts for only a minority of the total bill.

A typical example is a monthly bill for 230 kilowatt-hours of electricity. The electricity itself costs just €30.03, while the total payable amount reaches €84.11.

In other words, only 36% of the bill relates to electricity consumption.

Regulated network charges amount to €21.25, municipal fees and taxes total €26.11, while the ERT fee and other taxes add nearly €7. Overall, more than €54 of the bill consists of charges unrelated to electricity consumption.

This explains why households often see only modest reductions in their overall bill even after significantly cutting electricity usage. Suppliers compete only on the electricity supply component, while most remaining charges are determined by the state or collected on behalf of third parties.

Energy suppliers call for change

The issue of “overloaded” electricity bills was recently raised by the Association of Electricity Suppliers (ESPEN) in a letter to the relevant ministries.

The association argued that burdening electricity bills with taxes and charges unrelated to energy consumption makes it harder for consumers to pay their bills on time and creates a misleading picture of the real cost of electricity.

ESPEN also noted that the draft Local Government Code, which had been under public consultation, not only maintained the existing system but even proposed increasing the amount of municipal fees collected through electricity bills.

With overdue electricity debts already exceeding €3 billion, the association warned that such a move would further burden consumers who pay on time while increasing the already significant administrative costs borne by suppliers for collecting third-party charges.

The European approach

The Greek initiative is also in line with broader European efforts to remove non-energy charges from electricity bills.

Under the European Commission’s Affordable Energy Action Plan, member states are encouraged to reduce the tax burden on electricity bills and remove charges unrelated to energy consumption.

Similarly, the Citizens Energy Package promotes eliminating taxes and levies unrelated to electricity so that consumers can compare supplier tariffs more easily.

European regulatory bodies ACER and CEER have likewise argued that electricity bills should include only charges directly related to electricity generation, transmission, distribution, and supply, while taxes and other public levies should be collected through separate mechanisms.

The major challenge

Despite the government’s announcement, implementing the reform is expected to be far from straightforward.

The key question raised by industry stakeholders is whether Greece can create a new collection system capable of maintaining today’s high municipal fee collection rates without generating a new wave of unpaid debts or placing additional administrative burdens on citizens and public authorities.

If implemented as planned, the reform would represent the most significant restructuring of Greek electricity bills since the liberalization of the electricity market. For the first time, consumers would be able to clearly distinguish how much of their bill reflects the cost of electricity itself and how much goes toward taxes, municipal charges, and other third-party fees.