The Cyprus Energy Regulatory Authority (RAEK), imposing an administrative fine of €500,000 on the Distribution System Operator (DSO) of the Cyprus Electricity Authority (AHK).

The hefty fine is the result of systematic delays in submitting meter readings to the Electricity Market, which in some settlement cycles reached as many as 153 calendar days.

Key Provisions

The CERA decision provides for the immediate payment of a one-time administrative fine of €500,000, accompanied by a daily penalty of €500 for each day the violation continues after the decision is officially served. At the same time, the Authority characterizes the violation as “ongoing,” emphasizing that the Operator’s obligation to submit the data remains in effect and pending until it is in full and final compliance with the Market Rules.

The Timeline of the Case

The timeline of the case demonstrates that the problem did not arise suddenly, but is an outstanding issue dating back to the fall of 2025, despite repeated efforts to resolve it.

Specifically, as highlighted by the website cyprusenergy.news, in September 2025 a series of meetings took place involving the Minister of Energy, the CERA, the CEM, and the CSD, during which the Operator committed to resolving the issues by October 1 of that year—a deadline that ultimately passed without action.

The formal investigation process was finally initiated on May 4, 2026, with an internal memo from CERA, which led two days later, on May 6, to the decision to examine a possible prima facie violation.

This was followed by the service of the official warning to the DSD and the notification of the EAC Board of Directors on May 8, with the Operator submitting its written objections between May 29 and June 4, 2026, before the proceedings culminated on July 3, 2026, with the issuance of the condemnatory Decision 260/2026 and the imposition of the fine.

 The defense strategy and the… technical issues

In its response letter, the DSD acknowledged the failure to submit the data on time, attributing the responsibility to a combination of technical malfunctions and understaffing. Specifically, the Operator cited systemic malfunctions in the HES Advance and HES Gridstream systems, as well as infrastructure challenges, including performance issues with the meter data management system (MDMS) due to the mass installation of smart meters (AMI Rollout).

At the same time, he mentioned software errors and difficulties in the net metering/net billing systems and databases, while also highlighting the issue of understaffing, noting that the relevant unit currently operates with seven rather than nine staff members, while the position of Assistant Director remains vacant.

The Administrator argued that the violation was “of moderate severity,” as it did not directly affect the suppliers’ customer base nor lead to a suspension of procurement. At the same time, he cited his close cooperation with the authorities as a sign of good faith.

“Technical shortcomings are an internal matter”

The Regulatory Authority categorically rejected claims that the issue was of limited severity. According to CERA, the timely submission of data is fundamental to the functioning of the market, as monthly settlements and reconciliation procedures between participants rely on this data.

Regarding the technical and organizational difficulties faced by the DSD, CERA clarified that these are internal management issues that cannot be passed on to other market participants. These difficulties were taken into account only as a mitigating factor in determining the final amount of the penalty.

Sixth intervention regarding the same issue

Decision 260/2026 is the sixth consecutive intervention by the CERA on this specific issue (preceded by Decisions 452/2025, 454/2025, 41/2026, 107/2026, and 198/2026). The systematic non-compliance forced the Authority to combine the one-time fine with a daily monetary penalty in order to ensure the immediate and definitive resolution of the problem.

SEPIE: Validation of Suppliers’ Concerns

The Association of Electricity Suppliers’ Representatives (SEPIE) characterizes the CERA decision as a positive development that confirms the actual market distortions. As the Association points out in its statement, the concerns expressed from the outset were not merely theoretical, as supply companies were forced for a long time to manage their commercial risk and issue invoices without timely and reliable meter data, a situation that caused financial burdens and even raised sustainability concerns for some companies.

At the same time, SEPIE welcomes the recent high-level workshop organized by the Federation of Employers and Industrialists (OEB) with the participation of all relevant stakeholders, describing it as a substantial step toward the maturation and development of solutions for the Competitive Electricity Market. The Association states that it is ready to continue acting as a responsible and institutional interlocutor, putting forward realistic proposals for the benefit of consumers and the country’s energy transition.

(Source: Official CERA Decision No. 260/2026, July 3, 2026)