ECONOMY

Gov’t could approve PPC rate hikes

Public Power Corporation (PPC) climbed to a record high in Athens trading after a newspaper report said the government will approve the company’s request to raise electricity prices. PPC shares rose to their highest since the stock began trading in December 2001 yesterday. The stock increased -2.24, or 7.9 percent, to -30.50. According to Development Ministry officials, Minister Christos Folias plans to approve an average 21 percent increase in power rates over the next three years, as Kathimerini reported yesterday. The stock had surged 14 percent yesterday, its biggest one-day gain ever, after the state-controlled company announced it requested electricity price increases of an average 22 percent as of December 1. Greek power is cheap by European Union standards, as past governments have avoided unpopular price increases. PPC’s annual tariffs were raised an average 4.8 percent from August 1, 2006, the first above-inflation increase in four years. Prices were allowed to rise by an average 3.6 percent from August 1 this year. Development Ministry spokesman Angelos Kafkas declined to comment on the news report, saying there will «be news from next week» once the ministry receives a recommendation by the Regulatory Authority for Energy, the country’s electricity regulator. The authority, whose proposals aren’t binding for the government, may recommend as soon as next week that the increases be spread over a period of between two and three years, its president, Michael Caramanis, said. PPC had a record quarterly loss of -39.2 million for the three months through September. PPC’s costs, fueled by rising prices for oil and natural gas, exceed the government-controlled tariffs by a quarter, according to company estimates. The government of Prime Minister Costas Karamanlis, which won a second four-year term in elections two months ago with a parliamentary majority of two, is facing opposition pressure to reject PPC’s request. The request is a «provocation» and will hurt families and businesses, 17 parliament members of the main opposition PASOK said in an e-mail. (Bloomberg)