BUSINESS

Brussels may cancel energy cost cuts

Commission officials consider the measures to reduce rates for local industries to be possible state subsidy By Chryssa Liaggou

The European Commission is threatening to throw a spanner in the works of Public Power Corporation (PPC) plans to reduce energy costs for local industries, as it considers that the measures announced last week in Greece constitute a form of state subsidy.

On the fringes of a meeting of European Union energy ministers in Brussels on Wednesday, officials from the Directorate General for Competition expressed concern about the measures introduced at last Friday’s PPC general meeting to Greek Energy Ministry officials accompanying minister Yiannis Maniatis.

The European officials criticized the ministry over the fact that they had not been informed about the measures, and said that according to their information and their own estimates, the measures may constitute a public subsidy. They also told the Greek officials that they are awaiting a full set of details from the Greek side before raising a formal objection, referred to as a “reasoned opinion,” regarding the issue of state subsidies.

The ministry informed the prime minister’s office about this, and according to sources the latter has issued an order for the implementation of the measures and the relevant information to be sent to the competent authorities in Brussels with a full explanation.

This development constitutes a second blow from the Commission to the local industry. It has already twice rejected the measure of interruptibility – i.e. the grid operator’s option to cut the supply to energy-intensive companies at peak hours, thereby saving the industries a total of 70 million euros per year. The Commission’s latest intervention puts in doubt the bolstering of the industries with a total amount of 65 million euros per annum for this year and next.

The announcement of the measures to reduce electricity costs had already received very positive feedback from the local industry, with steel group Sidenor saying on Wednesday it would go ahead with a new investment of 10 million euros at its Thessaloniki plant and that it would examine the possibility of increasing shifts at the same factory on weekends too. It cited PPC’s decision to cut its rates by up to 25 percent for periods of minimum demand – i.e. nights and weekends.

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