Bad news is coming to Public Power Corporation from Brussels, as a probe by the European Commission’s Directorate General for Competition (DG Comp), which started with the unexpected arrival of inspectors at the offices of PPC and grid operator ADMIE earlier this month, has confirmed concerns about the power giant’s possible abuse of its dominant position.
Sources say that an investigation has confirmed that the algorithm according to which the hydroelectric plants are set in operation had been tampered with in a way that allows PPC to manipulate the system marginal price (SMP) that changes daily in the wholesale market.
According to the same sources, PPC has been notified of the findings of the probe and has already been invited by DG Comp to respond to questions.
In the context of this process DG Comp officials visited the PPC headquarters at the start of the month while in Brussels the competent officials have started writing up the decision that will be issued this fall and coincide with the market test for the lignite-power units – which is likely to open the way for the sale of hydroelectric plants too.
People familiar with the matter say that Brussels will demand that PPC restore the resulting loss and comply with market rules, which could mean fines reaching up to 10 percent of its annual turnover (which ranges around 5-6 billion euros). Such an amount is simply too high for the Greek power giant to contemplate, particularly in the current climate, and it will likely be forced to agree to the sale of its hydroelectric units. That was the very scenario that PPC had wanted to avoid, linking DG Comp’s sudden probe with pressure in that direction from the outset.
The possibility of the sale of the hydroelectric plants is also mentioned in the the revised bailout agreement between Athens and its creditors, thereby rendering DG Comp a key factor in developments for the future of PPC and the Greek electricity market in general. The government has until next month to present to the Commission with a list of the power plants that will go up for sale. The Energy Ministry has requested the consultancy services of Lazard and PPC those of McKinsey to that end.