Independent suppliers adjusting policies in view of PPC hikes

The country’s independent electricity suppliers, sensing opportunity for retail market share gains amid greater competition as a result of power utility PPC’s imminent tariff hikes, are looking at making price adjustments to capitalize on these changes.

The upcoming electricity tariff hikes by PPC, still the dominant player, will bring to an end distorted market conditions prompted by the utility’s refusal to adjust its pricing policy to considerably higher wholesale electricity costs.

Though the final price comparisons of packages – including surcharges and taxes – to be offered by suppliers will ultimately differ very little, as PPC intends to partially offset its tariff hikes with surcharge reductions, the independent suppliers will be keen to focus on tariff prices, specifically, and take advantage of the power utility’s hefty tariff increases.

PPC’s tariff hikes will range from 21.5 to 24.5 percent. This promises considerable leeway for independent suppliers to shape more aggressive pricing policies in the retail battle against the power utility.

PPC’s anticipated adoption of a clause triggering further tariff hikes should CO2 emission right costs exceed certain levels, and vice versa, is another favorable development for the independent suppliers as the stigma associated with their preceding implementation of this measure will be diluted.

The ambiguous immediate future of NOME auctions is a negative factor that spoils the otherwise favorable scene for independent suppliers. This ambiguity injects an element of risk to the plans of independent players for pricing policy adjustments.

It remains unclear if the year’s final NOME auction, scheduled for October, will take place. Energy minister Costis Hatzidakis has noted he intends to negotiate the  termination of NOME auctions with the European Commission.

State-controlled PPC would prefer that the October session does not take place, whereas independent suppliers see this disputed session as one more opportunity to stock up on lower-cost wholesale electricity, even at higher starting prices, for a certain period, which would further boost their level of competitiveness.