Energy ministry seeking to avoid the worst in bailout talks

The energy ministry is seeking to avoid the sale of main power utility PPC lignite-fired and hydropower stations, a demand made by the country’s creditor representatives as an alternative should the state-controlled power corporation miss market share contraction targets specified in the bailout.

The country’s creditor representatives returned to Athens earlier this week to recommence negotiations for the bailout’s prolonged second review.

Energy ministry officials hope that the range of options provided by the lenders for PPC may widen and include alternatives such as the establishment and sale of new subsidiaries in the electricity supply sector. The subsidiaries would carry a slice of PPC’s existing clientele.

Though PPC’s leadership has been promoting this plan for quite some time now, energy ministry officials presented it to the country’s creditor representatives for the first time last night. Ministry officials believe that its adoption would eliminate the threat of PPC needing to sell lignite-fired and hydropower stations.

Until now, the creditor representatives have warned that 40 percent of the utility’s electricity generation facilities will need to be sold if PPC keeps missing its market share reduction targets, expected to gradually fall to less than 50 percent by 2020. PPC missed its end-of-2016 target and remains dominant with a retail electricity market share of just under 90 percent.

Reliable sources noted that a less harsh alternative plan for PPC, one that would carry less political cost for the government, could result from the latest bailout talks.

PPC clearly favors the establishment and sale of new electricity supply subsidiaries over the recently introduced NOME auctions, viewed as catastrophic by the utility. They were introduced last October in an effort to break the utility’s market dominance by providing independent traders access to PPC’s low-cost lignite and hydropower sources.

However, at this stage, there are no indications that the creditors may ease the pressure being applied for PPC to offer greater electricity amounts through the NOME auctions.