Main power utility PPC’s collection campaign for unpaid overdue electricity bills owed to the corporation stands as its foremost concern, while efforts to pressure debtors to settle amounts owed are being intensified for all parties involved, including public sector companies, chief executive Manolis Panagiotakis has noted in a stern warning accompanying the utility’s poor financial results for the nine-month period.
PPC yesterday reported a third-quarter pretax loss of 101.7 million euros following a profit of 36.9 million euros during the previous year’s equivalent period, a result attributed to an increase in bad debt provision.
The utility’s rising level of consumer arrears, now over 2.1 billion euros, roughly half its bourse value, appears to be threatening PPC’s sustainability. The entire public sector, thousands of enterprises, and one in three household consumers have stopped paying their electricity bills Given the period’s fall in fuel prices – both natural gas and oil – which has lowered the utility’s operating costs, PPC ought to have recorded solid profit figures and be in a position to reduce tariffs offered to consumers.
Instead, PPC has recorded bad debt provisions for the past three-month period worth hundreds of millions of euros. A large percentage of consumer arrears owed to PPC is in danger of being lost. The bad debt provision registered for this year’s nine-month period more than doubled compared to the equivalent period last year to reach an alarming level of 691 million euros, while analysts forecast the figure could exceed 800 million euros by the end of the year.
Never before in its corporate history has PPC encountered such unsettling numbers. The bad debt provisions accumulated by low and medium-voltage consumers – households, shops, and businesses – rose by 408 million euros over the past year and 195.3 million euros in the last three months.
In response, PPC has launched a tougher collection campaign aimed at major and minor-scale debtors from both the public and private sectors, threatening thousands of consumers with power cuts. The utility has also introduced a payback scheme offering households the ability to service their debt amounts over as many as 36 installments.
However, frequent polical intervention as well as the inability of scores of households and businesses to cope amid the deep recession has made the collection effort difficult for PPC. Officials at the utility, basing their opinions on ongoing investigations, believe that a considerable percentage of debtors are able but not willing to service their electricity bill debts.
Of PPC’s 2.1 million low-voltage consumers behind on their power bill payments, 250,000, or 11.9 percent, are responsible for roughly 45 percent of the total amout owed by consumers to the utility, officials have pointed out.