Termination Of An Electricity Supply Agreement And Judicial Protection Of The Consumer

In the modern economic environment, access to electricity constitutes a fundamental social good. However, it is frequently observed that providers issue disconnection orders or terminate electricity supply agreements while bypassing the strict procedures laid down by law. In the present article, we analyse the conditions for the lawful termination of an electricity supply agreement, the common abusive practices, and the “tools” available to the consumer for their immediate protection.

The procedure for termination of the agreement by the provider pursuant to the Electricity Supply Code

As a matter of principle, the existence of overdue debts on the part of the consumer constitutes a lawful ground for termination of the concluded supply agreement and for disconnection of the electricity supply by the provider. However, a specific procedure provided for in the Electricity Supply Code must be followed in order for the disconnection of the electricity supply to be lawful and valid.

This procedure is set out in Article 39 of the Code and, more specifically, in paragraph 6 thereof, where three stages are provided for, which must be complied with cumulatively:

In particular, if the consumption bill is not paid within the deadline specified in the bill, the supplier takes the following actions:

A) It records the amount of the overdue debt in the immediately following bill and adds that amount, charged with the statutory default interest, to the total amount due under the new bill, which the customer is required to pay within the ordinary payment deadline of the new bill.

B) If the second consecutive payment deadline also expires without payment, the supplier may submit to the competent operator — meaning HEDNO — an instruction for deactivation of the load meter due to overdue debts. This instruction must mandatorily be notified to the customer.

C) If the overdue debt is not paid within ten (10) days from notification to the customer of the instruction for deactivation of the load meter, the supplier may terminate the supply agreement by submitting to the competent operator a declaration of cessation of representation, duly informing the customer. Following this, the physical act of disconnecting the electricity supply is carried out by the operator.

It is understood that all the above stages must be strictly complied with, in the prescribed order, in order for the termination of the agreement — effected by the provider’s declaration of cessation of representation to HEDNO — to be considered lawful and capable of producing legal effects.

When is the notice invalid or misleading?

The procedure provided for in the Code aims to inform the consumer of the impending disconnection, thereby avoiding the latter being taken by surprise, taking into account that electricity constitutes a vital good both for natural persons and for businesses. Any untimely or sudden disconnection of the electricity supply may lead to incalculable consequences for the consumer.

One of the most frequent points of friction is the manner of notification. More specifically, if the customer fails, for the second consecutive time, to pay the overdue amount, the provider may submit an instruction for deactivation of the meter to HEDNO.

With regard to the notification of the deactivation instruction to the customer, as also provided for by the Code at the second stage, it should be accepted that the deactivation instruction itself must be notified to the consumer, while the mere inclusion of a relevant indication concerning deactivation, possibly appearing on the bill to be issued, is not sufficient.

Indeed, in certain cases, such indication may appear on the bills issued for a relatively long period of time. However, such an approach cannot be regarded as being in line with the procedure provided for in the Code, because a specific and updated notice or “alert” is required, which must be temporally linked to the actual instruction given to the operator.

Otherwise, the sudden activation of an instruction given a considerable time earlier, without a new warning, constitutes contradictory conduct and is abusive pursuant to Article 281 of the Greek Civil Code.

Similarly, the declaration of cessation of representation submitted to the operator must also be notified to the customer in full at the third stage, because after that stage the operator proceeds with the physical act of disconnecting the electricity supply.

The abusive nature of the disconnection

In addition to non-compliance with the lawful procedure for disconnection of the electricity supply, as provided for in paragraph 6 of Article 39, the termination of the agreement by the provider may be contrary to good faith and may be rendered abusive on the basis of the circumstances prevailing in each particular case.

Indicative is the case heard by the Single-Member Court of First Instance of Thessaloniki in Judgment No. 6179/2023, where it was held, on a prima facie basis, that PPC’s refusal to continue supplying electricity to the applicant — a hatchery and poultry farming business, which had in fact been placed under a rehabilitation regime — would be found abusive as exceeding the limits imposed by good faith. Consequently, the provider was temporarily prohibited, until the issuance of a final judgment on the relevant ordinary action to be brought by the applicant, from proceeding with disconnection of the electricity supply to the business operated by the applicant.

Specifically, the applicant invoked an imminent risk and an urgent case, consisting in the fact that, without electricity, the incubation machinery would not operate, as a result of which 2,000,000 chicks, already at an advanced stage of incubation, would be at risk of dying, and the applicant itself would suffer financial damage in the amount of EUR 900,000.

The court held that any disconnection of the electricity supply to the applicant’s business would cause it irreparable harm, since its operation would be immediately interrupted, its 30 employees would be dismissed, and the rehabilitation plan would not succeed, with the result that it would be led into bankruptcy. Indeed, account was also taken of the fact that, given the applicant’s rehabilitation status, all electricity supply companies to which it had applied refused to contract with it.

In the case under examination, it was held that the applicant was making every effort to repay its overdue debt, having already paid the provider the total amount of EUR 48,490.27, with an amount of approximately EUR 19,000 remaining outstanding for full repayment. The provider’s refusal to continue supplying it with electricity, despite their almost twenty-year smooth cooperation, was held, on a prima facie basis, likely to be found abusive as exceeding the limits imposed by good faith.

Furthermore, it should be noted that the Electricity Supply Code, Article 39 paragraph 9, provides for the possibility for the provider to offer special programmes for the settlement of bill payments or for the arrangement of older debts, in particular through instalments, to customers who are likely to face difficulty or inability to repay consumption bills.

Such programmes must ensure repayment of the obligations, also taking into account each customer’s current electricity consumption, while the supplier is required to inform customers who may be included in special programmes.

Consequently, before termination of the agreement, an effort should be made to include the customer in a special programme for repayment of the debt through instalments. Otherwise, the sudden and inflexible disconnection of the electricity supply due to inability to repay the amount owed in one lump sum may be found abusive by the court, justifying the granting of interim measures in favour of the consumer.

Judicial protection through interim measures

When a provider proceeds to terminate the agreement without having complied with the procedure laid down in paragraph 6 of Article 39, or because the termination is contrary to good faith and is deemed abusive, the consumer may have recourse to the courts, seeking provisional regulation of the situation through the granting of interim measures pursuant to Articles 731 and 732 of the Greek Code of Civil Procedure, requesting that disconnection of the electricity supply be prohibited.

The immediate risk of power disconnection in a home or business constitutes, by its very nature, an urgent case justifying the granting of interim measures. It should be noted that the immediate granting of interim measures, even in the form of a temporary court order, becomes necessary, because the delay involved in the final resolution of the dispute through the filing of an ordinary action would entail adverse consequences due to the intervening disconnection of the electricity supply.

The limitation on full satisfaction of the right: A basic conceptual feature of interim measures is the prohibition of full satisfaction of the right to be secured, pursuant to Article 692 paragraph 4 of the Greek Code of Civil Procedure. In other words, full satisfaction of the right for which judicial protection is sought must be provided by the court hearing the main case and not through the route of interim measures.

The permissibility of granting interim measures, in the context of provisional regulation of the situation, in respect of continuing contracts for public utility services — supply contracts with PPC, EYDAP, OTE, etc. — has repeatedly concerned legal theory and case law, mainly on the basis of the question whether provisional regulation of the situation in such cases conflicts with the rule of Article 692 paragraph 4 of the Greek Code of Civil Procedure, which prohibits full satisfaction of the right.

The prevailing view supports that, in supply contracts, if the subject matter of the interim measures is the temporary prohibition on the provider proceeding with disconnection of the electricity supply within the framework of an already existing contractual relationship, then no issue arises under the rule of Article 692 paragraph 4 of the Greek Code of Civil Procedure.

In the present case, the granting of the requested interim measure does not lead to complete satisfaction of the right, since it has, by definition, a temporary duration and, in that sense, falls short in time of final judicial protection. In such cases, no issue arises of securing or preserving the right to be secured, but rather of temporarily maintaining the pre-existing conditions and preventing the creation of irreparable harm throughout the period until the right to be secured is finally adjudicated, namely the continuation of the supply agreement on the same terms and the provision of electricity until final judicial determination — Supreme Court Judgment 75/2014, Single-Member Court of First Instance of Patras 1183/2022, Single-Member Court of First Instance of Thessaloniki 5762/2021, Single-Member Court of First Instance of Kozani 56/2009.

However, in this context, a contrary minority view has also been expressed, supporting that there is no legal possibility of compelling the provider, by means of a decision on interim measures, not to “terminate” the supply agreement — in the sense of discontinuing the provision of services — because this would amount to a provisional order not to make a declaration of intent, which is a non-independent and ancillary obligation in relation to the obligation to provide a positive performance, with the result that no claim capable of being secured exists in the present case — Single-Member Court of First Instance of Lamia 473/2013, Single-Member Court of First Instance of Zakynthos 622/2010.

By contrast, if the subject matter of the interim measures is a provisional order requiring the provider to conclude an electricity supply agreement with the applicant — where the property is not electrified or the disconnection has already taken place, resulting in a request for reconnection of the supply — the prevailing view is that the court has no power to order the provider to supply electricity to the applicant’s property, since such an interim measure would fully satisfy the right to be secured — Single-Member Court of First Instance of Thessaloniki 6179/2023.

It follows from the above that the consumer must act immediately by having recourse to the courts, because, if the physical act of disconnection of the electricity supply by HEDNO is also completed, the application will be dismissed as inadmissible, since the request will then be for reconnection of the supply, namely a physical act which constitutes an order to make a declaration of intent that is not permissible through interim measures, as it presupposes a final judgment in the main declaratory proceedings pursuant to Article 949 of the Greek Code of Civil Procedure, while also leading to full satisfaction of the corresponding right.

By way of conclusion

The disconnection of electricity supply constitutes an extremely serious measure, which is permitted only subject to strict conditions and full compliance with the lawful procedure. In the event of a breach of the applicable rules or abusive conduct by the provider, the consumer has the possibility to react immediately and effectively, in particular through judicial protection by means of interim measures. Timely action is decisive for preventing irreparable harm and ensuring the continuation of a good of vital importance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.