LAGIE relaxes payment demands amid capital controls

LAGIE, the Electricity Market Operator, has unofficially loosened strict market regulations concerning the amount of time electricity retailers have to to cover the cost of electricity supplied to them.

The looser market condition, which applies for all electricity retailers, including main power utility PPC, has resulted from the serious overall liquidity problems caused in Greece by the implementation of capital controls almost a fortnight ago. Cash-strapped electricity consumers have been unable to pay retailers, who, in, turn, have had trouble keeping up with payments to electricity suppliers.

Prior to the current informal relaxation of electricity market regulations, electricity retailers had four days to cover any amounts owed to electricity suppliers. Even tougher conditions apply for vertically integrated electricity retailers backed by their own power-producing plants. In such cases, they have three days to cover electricity supply amounts.

Strict regulations were implemented by LAGIE following the financial collapse of two electricity retailers, Energa and Hellas Power, in the not too distant past. If deadlines are not met, companies risk being ousted from the market.