PPC discount cut offers some relief to independent players

A main power utility PPC decision reached yesterday for a reduction of its punctuality discount, offered to its consumers paying power bills on time, from 15 percent to 10 percent as April 1, promises to offer some relief to the retail electricity market’s independent suppliers.

Even so, overall market conditions remain challenging for independent players as they have little leeway to undercut PPC’s offers.

Independent suppliers have been forced to activate clauses enabling higher tariffs as a result of increased wholesale costs. But PPC’s discount reduction, to essentially raise its prices by 5 percent, will enable independent players to slightly increase their revenues and make more competitive offers.

Independent players also stand to soon benefit from a return of the RES special account’s surplus in 2018. The abolishment, as of the beginning of this year, of a supplier surcharge paid into the RES special account by suppliers is also a favorable development.

But the good news ends here as independent suppliers face a series of negative factors such as a gradual rise of wholesale electricity prices, prompted by higher CO2 emission right costs, as well as lofty fuel prices.

In addition, amounts of lower-cost electricity offered to independent suppliers through NOME auctions stand to be reduced if PPC’s ongoing sale of lignite units is successfully completed.