PPC hydropower unit sales not included in revised bailout

Hydropower stations controlled by the main power utility PPC will not, for the time being, need to be included in the utility’s prospective package of units that must be sold, the latest Greek bailout update, leaked yesterday, indicates.

A preceding draft of the agreement had included a term specifying that hydropower stations would be added as an additional measure, if needed, but this was eventually replaced by a toned down, less specific condition noting that further measures could be taken once the sale effort of carbon-fired power stations has been assessed.

This softer approach suggests the country’s lenders are willing to make life somewhat easier for the Greek government. Even so, the inclusion of hydropower stations to the PPC sale package will not be avoided if an upcoming market test, expected to take place in autumn, reveals insufficient investor interest in the utility’s carbon-fired power stations.

Not too long ago, Elpedison officials, responding to questions, made clear that the company would not be interested in a PPC sale package comprised entirely of carbon-fired power stations.

The interest of investors in state-controlled PPC’s hydropower stations was presumably discussed at a meeting yesterday between Greece’s energy minister Giorgos Stathakis and Italy’s economic development minister Carlo Calenda. Details of the meeting’s agenda have not been disclosed.

The updated bailout agreement notes that if PPC fails to meet market share contraction targets, to be assessed every six months, then NOME auction revisions and additional structural measures will probably be required.

The NOME auctions were introduced last October to help break PPC’s market dominance by offering independent traders access to the utility’s low-cost carbon and hydropower sources.

A review of the NOME auction mechanism will be conducted every six months, beginning January, 2018, not December, 20017, as was planned in a bailout draft, it has been agreed.

In another bailout requirement, a proportion of public service compensation (YKO) payments made by PPC but not yet retrieved by the utility will need to be collected from consumers over the next five years. PPC has put the total amount owed at 735 million euros. The bailout’s previous draft had set December, 2019 as the collection deadline, which would have led to heftier surcharges over a shorter period of time.

RAE, the Regulatory Authority for Energy, is expected to decide on the final YKO amount in June. It is expected to be smaller than the amount claimed by PPC.