Market operator’s upcoming supplier surcharge amounts may trouble PPC

LAGIE, the Electricity Market Operator, will, at the end of this month, calculate and invoice total surcharge amounts expected from electricity suppliers for March plus any outstanding amounts since October 1, 2016, when the supplier surcharge was introduced.

These calculations, issued monthly, as required by RAE, the Regulatory Authority for Energy, factor in an upper limit of 15 euros per MWh.

Independent suppliers more or less know what to expect, given the monthly amounts already covered, but the surcharge amount could provide yet another challenge for PPC, facing cash flow issues as well as bailout-related market share contraction and production unit sale requirements.

The utility decided to stop paying the surcharge at the beginning of this year before RAE stepped in to take action. Even so, PPC appears to have been underpaying its expected surcharge amounts.

The respective retail electricity market shares of suppliers are taken into account when determining surcharge levels. This means that PPC, which still maintains a dominant market share of just under 90 percent, is responsible for suppling the bulk of the surcharge.

Surcharge levels moved within normal range in March, as had been initially calculated by an Aristotle University of Thessaloniki study conducted prior to the surcharge’s introduction.

The surcharge averaged 6.59 euros per MWh between March 1 and 19 with the upper limited imposed. Without it, the average would have been just marginally higher, at 6.94 euros per MWh.

Authorities needed to impose an upper limit after the electricity supplier surcharge level greatly exceeded anticipated levels. The surcharge averaged 8.83 euros per MWh in February with the upper limit intact. Had it not been imposed, that month’s average would have reached 24.32 euros per MWh.