The energy ministry has approved a RAE (Regulatory Authority for Energy) proposal offering the main power utility PPC 360 million euros in Public Service Compensation (YKO) returns for services covering 2012 to 2016.

An additional amount of between 10 and 20 million euros will need to be added to this total as interest because PPC’s recoverable sum is to be paid out over a five-year period.

Now that the energy ministry has approved the YKO sum determined by RAE, PPC is expected to step back from its legal action threat over a discrepancy between the amount proposed by the energy authority and the amount the utility believes it is owed. PPC had set its YKO figure – for 2012 to 2016 – at 735 million euros.

Earlier this week, prior to the energy ministry’s approval, PPC’s chief executive Manolis Panagiotakis insisted on the return of the greater amount set by the utility. He cited major financial difficulties faced by the utility.

According to energy ministry sources, the cost of this 360 million-euro return to PPC will not be rolled over to electricity consumers, through higher electricity bills, but, instead, shouldered by the national budget. This remains to be seen. Deputy finance minister Giorgos Houliarakis has promised to make fiscal adjustments in order to carve out the required amount.

The YKO surcharge is added to electricity bills and paid by consumers to primarily subsidize high-cost electricity production on Greece’s non-interconnected islands and also support the Social Residential Tariff (KOT) program offering underpriviledged households subsidies for lower-cost electricity.