Various committees assembled to press ahead with a series of bailout-related energy reforms for the energy ministry are currently finalizing their proposals ahead of a crucial local meeting tomorrow, during which pending details on more pressing and developed reforms such as the new CATs, NOME-type auctions and the “distruption management” plan, are expected to be tackled.
At this point, energy ministry officials consider the new CATs and the Variable Cost Recovery Mechanism, to help cover independent power station start-up costs, as less demanding tasks than the efforts concerning the NOME-type auction plan, intended to open up the retail electricity market, and the privatization effort for IPTO, the power grid operator.
Greece has committed itself to seven energy-sector reforms by the end of this month. The deadline may be informally extended to mid-October.
These bailout commitments include implementing temporary and permanent CATs; introducing a new Variable Cost Recovery Mechanism, locally acronymed MAMK; adopting measures to offset debt issues between the main power utility PPC and the electricity market operator; making gas market reforms; introducing the “distruption management” plan, which will enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator; revising PPC tariffs based on production costs, in place of a 20 percent discount offered to high-voltage consumers; and discussing, with the European Commission, a plan for NOME-type auctions with the aim of reducing PPC’s retail and wholesale electricity market shares by 25 percent. If an agreement on the NOME-type auctions is not reached by the end of October, Greek officials will need to agree on alternative measures offering equivalent results with regards to PPC’s market shares.