ECONOMY

Power tariffs in for 5 percent hike

The Public Power Corporation (PPC) will up tariffs by about 5 percent as of next year due to rising energy costs, despite recent drops in international petrol prices, the utility’s president, Takis Athanassopoulos, said yesterday. The head of PPC said the tariff hike is needed to offset higher costs from natural gas which track petrol price movements with a lag of between three and six months. In the second and third quarter of next year, natural gas prices will drop and this will result in a gradual decrease in electricity tariffs, he said. January’s increase will be more than offset by expected tariff cuts later in the year, which may even result in a net drop on household power charges for the year, according to PPC officials. Despite Greece having formally deregulated its power market, the sector is still dominated by PPC, which is the country’s only provider of electricity to households. PPC’s prices are set by the government, which also owns 51 percent of the company. The power utility has said it expects to post a huge loss in the second half of the year due to increased fuel import costs and expensive purchases of energy from third parties to cover demand. PPC posted a worse-than-expected 111.80-million-euro loss in the first half, hurt by soaring energy costs, electricity purchases from abroad, and a one-off provision for carbon dioxide emissions. Shares in PPC, which has a market value of 2.26 billion euros, plummeted 6.3 percent to 9.76 euros on the Athens bourse yesterday. The shares have given up more than 63 percent in the last six months. Meanwhile, PPC subsidiary PPC Renewables presented yesterday its 2-billion-euro investment plan that will be implemented up until 2014. According to EU directives, 18 percent of total power consumed in Greece, some 10,000 megawatts, needs to be produced by renewable energy sources by 2020. The figure currently stands at 1,300 MW.