PPC’s call to boost rates is exploitative

The demand by the Public Power Corporation (PPC) – which has already been approved by the Regulatory Authority for Energy (RAE) – for the right to hike electricity rates 2 percent above inflation due to rising oil prices will hinder the government’s efforts to put a lid on inflation. First and foremost, such an initiative breaks with common sense and simple mathematics. Everyone knows that oil plays a relatively small role in PPC’s production activities (17 percent, to be precise) while most of its energy (60 percent) is produced from lignite, a resource whose price has not increased. In view of the above, PPC’s argument for an overall increase in the price of electricity – by a total of around 5.5 percent – can be described as shallow. Indeed, it can only be imposed because the electricity board enjoys a monopoly in Greece’s electrical energy market. However, the exploitation of this advantageous position goes against the broader interests of Greek society, the national economy and the government itself. This is doubtlessly something that Development Minister Dimitris Sioufas is well aware of as it will be he who decides whether or not to ultimately give the green light to the proposal. PPC should attempt to boost its profitability by rationalizing its operations and monitoring its operating expenses. It should not burden consumers with the cost of boosting its profits. Such an initiative would not only be exploitative and abusive (as PPC is a monopoly) but it would also give the wrong message to all other businesses that they can hike their prices above the inflation rate and blame it on rising oil prices. To conclude, the government should convince PPC directors to concentrate on rationalizing the operation of their enterprise and not impose further financial burdens on consumers.