Industrial sector left out of PPC’s electricity discount offer

Greece’s industrial sector is deeply troubled by last week’s electricity discount offer announced by the main power utility PPC, whose coverage is limited to low-voltage consumers and a small proportion of medium-voltage consumers, meaning the larger industrial consumers have been left out.

The discount offer, estimated to be worth about 80 million euros for a year, was delivered as an incentive to reduce the level of unpaid overdue electricity bills owed by consumers to PPC, now at about two billion euros. Tariffs for the industrial sector remain unchanged at the level set by PPC two years ago.

However, certain larger-scale electricity consumers, such as supermarkets and other retail chains, will benefit from the new discounts.

Market officials have already questioned the degree of fairness of PPC’s pricing policy. Critics have pointed to a number of favorable developments for PPC over the past couple of years, such as the abolishment of the Variable Cost Recovery Mechanism, locally acronymed MAMK, and CATs (Capacity Availability Tickets), as well as the drastic reduction of oil and natural gas prices. These developments have not been passed on to PPC’s pricing policy, critics argue.

These savings, for PPC, could have been even more substantial had the power utility not drastically reduced its level of lignite-based production, which was replaced by electricity imports. However, more recently, PPC did boost its lignite-based production following difficulties faced by imported electricity procedures as a result of the imposition of capital controls. This development has raised questions as to the motives behind certain PPC decisions in recent times.

Whatever the case, it is clear that PPC’s operational costs have fallen significantly and widened the power utility’s profit margin, as was reflected by the corporation’s first-half results posted last week.

The discounts offered by PPC to smaller-scale consumers were made with rival retail electricity firms in mind. Larger-scale industrial consumers, who have no other alternative than to be supplied by the main power utility, were neglected. Tariffs for the industrial sector are already competitive, according to PPC, which is an easy claim to make as, in Greece, no other electricity suppliers exist to serve industrial power needs.

However, comparing PPC’s industrial tariffs with those offered in other parts of the EU clearly indicates that the Greek power utility is not offering local industrial enterprises competitive rates.

Officials have pointed out that the problem stems from the country’s political leadership, which permits PPC to shape industrial policy matters.