ELTA an early candidate in PPC sale plan to offer retail portion

ELTA (Hellenic Post) has emerged as the first candidate to express an interest in acquiring a share of main power utility PPC’s clients through the latter’s plan to split and sell a portion of its business in the form of at least one new retail company to be offered through a tender.

Though market players remain hesitant about the PPC plan, fearing it could burden robust independent suppliers with undesirable PPC customers carrying arrears, the power utility appears determined to press ahead with the initiative as a means of avoiding bailout-linked market share contraction targets to be sought through the just-introduced NOME auctions.

The objective of the NOME auctions is to provide third parties with access to PPC’s low-cost lignite and hydropower sources as a measure to help break the utility’s market dominance.

PPC’s new retail company or companies are planned to represent about 6 to 7 percent of the utility’s market share, or roughly 400,000 clients. Last week, PPC’s chief executive Manolis Panagiotakis noted that the new company would be formed by March.

ELTA purchased a 15-MW package of electricity at last month’s inaugural NOME auction but does  not possess a retail network to supply this amount to the market. As things stand, ELTA could either sell this amount to suppliers at a small profit, at best, return it to the grid at a loss.

Alternatively, if PPC carries out its plan to stage a tender selling a new retail company, or companies, and ELTA emerges as the buyer, the latter would not only be able to supply the 15 MW electricity amount to the market but also suddenly emerge as the market follower with a 6 to 7 percent share of the electricity retail market, well ahead of the current second-placed firm, currently holding a share of about 3 percent. PPC still dominates with a market share of about 88 percent.

ELTA had commissioned PPC as a technical adviser for a development plan.

The majority of independent suppliers have declared they cannot adopt positions on the PPC plan as it remains murky, adding that the type of clients to be included in the utility’s split-and-sell plan are a prime factor.