PPC presents plan, defends hikes

The Public Power Corporation (PPC), Greece’s power utility, is open to cooperation with third parties for the production of power apart from the 3,500 megawatts provided by its business plan. PPC will also seek at all cost penetration into the natural gas market, even if the state, the main shareholder, vetoes its acquisition of 30 percent of the Public Gas Corporation (DEPA). As far as the proposed electricity rate hikes are concerned, which average 21.7 percent, the corporation expects additional revenues of -900 million per year over the next seven years, which will fund part of the investment that is to total -11 billion in the 2008-2014 period. The rest will come from new client connection charges and from borrowing. The above emerged from yesterday’s presentation of the PPC business plan for the next seven years. The corporation’s president and CEO, Takis Athanassopoulos, reiterated at that meeting that he is not resigning and that if the state rejects his proposals, he will produce some better ones, always looking out for PPC’s best interests. He added that he has excellent relations with the Economy and Development ministries. Regarding the company’s strategy for entry into the natural gas market, Athanassopoulos did not rule out the possibility of PPC’s exclusion from the share capital of DEPA. He did add though that the clause of PPC’s entry for a 30 percent stake in DEPA should have been activated years ago, as natural gas holds a significant part of the company’s energy balance, while PPC contributes 80 percent of DEPA’s turnover. He said that if the state decides PPC can not buy into DEPA, then PPC will turn to alternative options it has already examined and are associated either with its participation in a third natural gas company or with the start of an independent activity. He also announced PPC’s interest in the development of city networks, with its possible participation in tenders for the operation of new gas supply companies in central and northern Greece. On the rise in rates, Athanassopoulos acknowledged that the increases are big but said: «I feel sorry that for decades PPC had not taken a stance about the serious structural problems this country has in its electricity production. Now PPC is forced to act. The rate rises we have proposed are the slowest possible in order to secure the investment in production and upgrade the network to ensure power supply without problems for all Greeks.» Union representatives on the PPC board appeared vehemently opposed to the proposals for rate rises. The representatives of the two union factions, affiliated with the two main parties, said in a joint statement that they disagree with the increases particularly for domestic consumption and qualified Athanassopoulos’s proposals as «personal views,» as they have not been approved by the PPC governing board. Key points of the Public Power Corporation’s new strategy – Electricity rates that reflect the cost. – Change in the fuel balance by reducing lignite to 31.1 percent and the introduction of coal up to 7.5 percent, as well as an increase in hydroelectric and renewable energy source production at the expense of oil production. – Withdrawal of the old and low-output units with a total capacity of 2,400 megawatts and inclusion of new ones with a total capacity of 3,500 MW in the 2010-2014 period. – Investment of -1.3 billion on islands by which operational costs will drop by 35 percent, investment of -2.8 billion in distribution networks and -1.4 billion in transmission networks. – Investment of -1.95 billion in renewable energy sources so that they obtain a 20 percent share by 2012. – Foundation of six subsidiaries and separation of the transmission and distribution domains. – Entry into the natural gas market with the acquisition of 30 percent of the Public Gas Corporation (DEPA). – Entry into the real estate market with the utilization of the corporation’s property, which is worth an estimated -1.4 billion.