The government has announced a support package worth over 250 million euros for the state-run main power utility PPC, whose financial results and share price are under pressure as a result of a number of unfavorable conditions, including rising CO2 emission right costs.
The government plans to abolish a supplier surcharge and coal tax as part of the support package.
The termination of the supplier surcharge commitment, to become effective as of January 1, 2019, is expected to benefit PPC by 50 million euros in 2018, 130 million euros in 2019 and 70 million euros in 2020.
Electricity suppliers stand to be reimbursed for 50 percent of supplier surcharge amounts paid in 2018, according to sources.
According to bailout terms, the supplier surcharge was set to be reduced by 30 percent this year and 50 percent in 2019. However, the government has opted for a greater surcharge reduction of 50 percent this year before abolishing it in 2019.
PPC stands to benefit as a result of the government’s plan to abolish a coal tax, costing 2 euros per MWh of electricity generated. The immediate savings here are estimated between 25 and 30 million euros.
In addition, the government is soon expected to announce the details of a CO2 emission right costs-related clause designed to increase electricity tariffs when CO2 costs are elevated and decrease them when these emission right costs are lower. Resulting tariff hikes, if needed, will not exceed 1.5 to 2 percent, government officials have assured.