Greece’s creditors have raised the issue of Public Power Corporation’s dominant position in Greece’s wholesale and retail markets, sources said after staff-level meetings conducted in Athens this week.
This appears to point to negative developments for Greece’s electricity giant: These may range from the renegotiation of power auctions on the basis of the obligation to concede even larger quantities of cheap energy to PPC’s competitors, so that they can compete with the utility on more favorable terms, to the imposition of new measures, such as the obligation for it to sell hydroelectric units too.
The creditors suggest that PPC’s abuse of its dominant position in the retail market is evident in the utility’s pricing policy, which does not fully reflect the various costs of electricity, and the 15 percent discount offered to customers who pay their bills on time. The creditors say these factors are partly responsible for the slow pace of the retail electricity market’s liberalization and the distance between PPC’s actual market share and the targets the country has set and pledged to achieve.
The official data from the country’s energy exchange show that, instead of declining, PPC’s market share actually grew by 1.5 percentage points from 78.63 percent in November 2018 to 80.29 percent in December 2018.
At this stage, the creditors appear to be on PPC’s side regarding the request it has submitted to the energy minister to pass on part of the increased costs it faces either through the introduction of a system marginal price charge or of a carbon emissions charge, combined with the reduction of the timely payment discount for customers from 15 percent to 10 percent.
The issue of PPC’s abuse of its dominant position in the wholesale market constitutes a blow for the company, as it will increase its losses from the power auctions. Some sources say the creditors’ intervention appears to have already factored in the failure of the process to sell four coal-fired plants before it has actually concluded, while also raising the issue of conceding hydroelectric plants, which are viewed as vital for the utility’s future.
Late on Tuesday the European Commission approved the extension of the submission period for bids for the coal-fired plants, which was supposed to end on Tuesday.