LAGIE takes legal action against IPTO for delayed RES payments

LAGIE, the Electricity Market Operator, has resorted to legal action against IPTO, the Independent Power Transmission Operator, over a rising amount of overdue payments which the former relies on to pay renewable energy source (RES) producers for their output.

According to sources, lawyers representing LAGIE filed the operator’s case to an Athens court of first instance earlier today.

Following a number of warnings, as had been reported by energypress, LAGIE decided to take the matter to court following the increasingly desperate financial state of the RES special account, currently causing major delays for RES production payments. LAGIE had also taken legal action against IPTO just over a year ago.

As has been widely reported, the domain’s cash-flow problem begins at PPC, the Public Power Corporation, IPTO’s parent company, which is struggling to meet its financial obligations as a result of a growing amount of overdue unpaid electricity bills by consumers. Consequently, PPC is unable to provide IPTO an Emission Reduction Tariff (ETMEAR) that is withheld to pay RES producers. As part of the domino effect, IPTO is then unable to pay LAGIE, which, finally, cannot pay for RES production.

LAGIE’s administration recently forwarded a letter to Environment, Energy & Climate Change Deputy Minister Makis Papageorgiou urging ministerial intervention for a solution to the sector’s cash-flow problem.

In the letter, the operator noted it was prepared to accept payment delays of up to two months, but IPTO had fallen four months behind schedule, while, worse still, the prospects appeared onerous. IPTO would have needed to produce a 375-million euro payment to LAGIE by the end of December to rein in the delay to two months, but failed to do so. LAGIE, in the letter, urged the Energy Ministry to push for payment of electricity bill amounts owed by the public sector to PPC, estimated at over 180 million euros. The operator also noted that PPC should seek credit support to resolve its worsening cash-flow problem.