Energy ministry officials and the country’s creditor representative team handling Greece’s energy-sector reforms are scheduled to next meet on January 11 for talks on the NOME auction plan, intended to offer third parties access to main power utility PPC’s low-cost lignite sources and help break PPC’s near-monopoly in Greece’s electricity market. The plan needs to be completed by no later than February.
The two sides continue to be at odds on a number of issues concerning the final NOME plan, judging by recent correspondence exchanged, according to energypress sources.
The electricity sector’s other major reform issue, the breakway of IPTO, the power grid operator, from PPC, its parent company, will also be discussed at the upcoming meeting. The appointment of a foreign consulting firm to evaluate the fixed assets to remain with IPTO in its breakaway from PPC, and also offer solutions for the overall procedure, may be named by Greek officials at the meeting.
Returning to the NOME plan, the creditor representatives have apparently told Greek officials that their auction model proposal does not suffice to achieve the effort’s objective of transferring 50 percent of PPC’s retail market share to alternative companies by 2020.
The troika objections may lead to the re-emergence of two older proposals. A plan to part-privatize PPC may be retabled, or, alternatively, a previous NOME plan may be transformed from transitional to permanent.
As for the current negotiations, the lenders have proposed that bidders acquire control of power units, which would offer them full management, as a special type of leasing arrangement that will lead to the objective of reducing PPC’s retail market share by 25 percent in the short term and 50 percent by 2020. Essentially, rather than selling units, which would provide PPC with cash for investments or debt reduction, PPC, through the plan proposed by the lenders, will lease units, while maintaining ownership and personnel.
This proposal is believed to have caused extreme unrest among Greek officials, who consider it as being even more unfavorable for PPC than the older part-privatization plan, whose resulting breakway unit was dubbed “Little PPC”.
The country’s commitment to the NOME auction plan, named after the auctions conducted by France’s EdF, offering electricity to private-sector suppliers and industrial enterprises, was included in last summer’s third bailout deal for Greece as a tool to help liberalize the electricity market.