PPC considers excluding production from partnerships

The main power utility PPC’s administration wants the utility’s potential partnerships with private-sector enterprises, an initiative intended to reduce its dominant market shares, to be limited to trade and supply activity, without the inclusion of any production units in future consortiums, according to energypress sources.

PPC officials contend that the bailout-related need to reduce the utility’s share of electricity production to less than 50 percent, from the current level of roughly 60 percent, can be easily attained through the withdrawal of some of its old  producing facilities.

This alone would suffice, which makes the establishment of partnerships with private-sector partners in the production domain, with the latter holding majority stakes, unnecessary, according to the utility’s administration.

It is a different story for the utility’s electricity supply business activities, where PPC’s market share reaches levels as high as 98 percent. Partnerships in this domain, in which PPC would hold minority stakes of between 30 to 40 percent, would help reduce its market share, as is demanded by the bailout agreement. PPC must reduce its market share in electricity supply to less than 50 percent by 2020.

According to sources, PPC’s administration is already engaged in talks with certain private-sector major players currently active in Greece’s retail electricity market.

Should PPC choose to neglect production in its partnerships plan, it will leave unresolved another requirement concerning the need for the utility to offer third parties access to its lignite sources. The inclusion of private-sector partners in both electricity production and supply activity would fulfill this requirement. PPC has had to confront legal challenges at European courts over its refusal to liberate the lignite market.

Two major private-sector players, Elpedison and Mytilineos, have both already publically expressed an interest to establish partnerships with PPC in electricity production and supply. Heron, the Greek market’s other vertically integrated energy corporation, is believed to be interested. It remains unknown how these firms could react if PPC decides to limit its partnership proposals to the supply sector.