Gov’t bows to pressure for end to high-voltage discounts

The Greek government has succumbed to pressure from lenders for the elimination of lower electricity tariffs offered by PPC, the main power utility, to high-voltage consumers, including industrial enterprises in the cement, steel, aluminium, paper and ceramics sectors.

High-voltage consumers had been given a 20-percent discount on electricity tariffs following a decision reached at a PPC shareholders meeting early in 2014.

Although these discounts had not managed to lower domestic energy costs to levels enjoyed by industries operating in other EU member states, they did offer respite to many sectors.

The ball is now in PPC’s court as the power utility has continued to present elevated production costs. If the corporation is to introduce cost-based tariffs, as it has noted, a new wave of electricity increases may be on the way for the industrial sector.

These latest developments, combined with delays on other fronts concerning energy cost reductions, increase the pressure on many industries to remain afloat, and could prompt additional company closures.

The agricultural sector, currently offered favorable elecricity supply terms as a supportive measure for production and competitiveness, may also be affected by the implementation of cost-based tariffs at PPC.

Other consumer categories are not expected to feel the effect of cost-based tariffs, if implemented. In any event, any changes will be inspected by RAE, the Regulatory Authority for Energy.

The latest Greek proposals in the bailout talks include a pledge by the government to strengthen RAE’s functional and financial independence. Until now, the Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis has warned RAE’s executive powers will be confined amid claims that the authority is serving private-sector energy interests.