NOME starting price decision settles long PPC cost dispute

A ministerial decision setting the starting price for the imminent NOME auctions settles years of conflict and controversy over the operating costs at PPC, the main power utility, vindicating the industrial sector.

Debate over the utility’s operating costs began roughly a decade ago when high-voltage electricity tariffs were liberalized along with PPC’s obligation to freely negotiate new price levels with the industrial sector.

Over the years, there has been much dispute and discussion over PPC’s true operating costs as well which charges the utility ought to factor in when calculating electricity tariffs for major industrial customers given their respective energy consumption profiles.

The dispute has highlighted the unique operating environment of industrial enterprises and the complexity entailed in seeking to set their electricity tariffs. Though progress had been made, under pressure applied by the country’s lenders, the core issue of determining PPC’s variable production costs had remained unresolved.

A ministerial decision setting PPC’s lignite variable cost at 27.26 euros per MWh, included in the NOME starting price, confirms that price level proposals made by industrial enterprises during negotiations with PPC were not below cost, as certain officials siding with the utility have contended, especially its unionists.

The upcoming NOME auctions are intended to provide third parties with access to PPC’s low-cost lignite and hydropower sources as a measure to help break the utility’s market dominance.