An ongoing investigation by the European Commission’s Directorate General for Competition, launched about a month ago by a raid of the main power utility PPC’s headquarters and focused on methods applied by the utility to determine its wholesale electricity prices, appears to be edging towards preliminary findings.
The probe by DG Comp officials, according to energypress sources, is investigating PPC’s ability to pursue an aggressive pricing policy. The utility’s suspected pricing manipulation and use of lignite-fired and hydropower stations to keep wholesale prices at artificially low levels are being investigated.
The DG Comp team’s early findings suggest that PPC, citing technical reasons, is deviating the System Marginal Price (SMP), used to set wholesale prices, away from actual energy costs, sources informed.
Having already determined the susceptibility of wholesale prices to market abuse practices, DG Comp inspectors are believed to be preparing a response.
The resulting market conditions are making it difficult for independent players to position themselves competitively in the daily electricity market.
Despite the suggestion that preliminary findings may be emerging, more time will be needed for concrete results as the investigation is said to be very complex procedure. It had been recently suggested that preliminary findings could be delivered by the summer, but this now seems highly unlikely. The probe, certain insiders believe, will take a long time to complete.
Subsequently, the fear of penalties will loom over PPC as the country’s lenders apply pressure for measures including the sale of production units owned by the utility.
Certain officials in Brussels appear to be linking the DG Comp probe with a bailout plan entailing the privatization of PPC’s 17 percent, despite the fact that the two cases are not directly related.
Given PPC’s troubled financial position at present, any resulting penalties could prove devastating for the utility. In this event, the sale of PPC production units could be resorted to as a compromise deal.