This week can be expected to be crucial for the future standing of IPTO, Greece’s gas grid operator, following a recent management-related demand by the country’s lenders in a plan being worked on to avoid the operator’s privatization.
Environment and Energy Minister Panos Skourletis is expected to meet with lenders during the week for a new round of talks. A specific date has yet to be announced.
The lenders, who had accepted a Greek proposal for the establishment of a new company to take on the operator’s fixed assets, are now demanding that its management be assumed by a private-sector company, which would enter the deal as a strategic investor, regardless of the stake it will hold in the new company. Based on the plan, the Greek state will hold a stake of at least 51 percent in the new company.
The Greek government considers the management-related demand by lenders as unreasonable, even aggressive, and fears the IPTO negotiations could be affected. A counter proposal is expected to be made by Greek officials.
IPTO is a wholly-owned subsidiary firm of the main power utility PPC, whose overwhelming market dominance in Greece’s electricity market, from production to retail, will need to be drastically restricted as part of the bailout deal.
At this stage, it appears the lenders are adamant about their position on the IPTO-related management matter. All the Greek officials appear to have secured at this stage is avoidance of IPTO’s privatization.
In another preceding condition, the lenders demanded that the new company to take on IPTO’s fixed asssets will need to be supervised by a ministry other than the energy ministry, such as the finance ministry.
The management demand raised by the lenders is an issue Greek officials would have wanted to avoid as they essentially feel the Greek state will lose control of the country’s gas networks.
The time pressure on Greece for pending bailout reform demands is building up. An informal extension granted to local officials by the lenders for various energy-sector reforms cannot be expected to provide more than one or two weeks.
As for the new CAT mechanism, another pending energy-sector reform, its temporary plan, originally anticipated for 2015, now appears set to also apply for 2016.
Greece’s “disruption management” plan – to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator – is expected to be presented this week to industrial and renewable energy source (RES) sector officials, based on the energy minister’s intentions of a few days ago.
Greek officials are still awaiting a European Commission response to the country’s proposal for NOME auctions, promising wholesalers access to PPC’s low-cost, lignite-fired electricity production.