PPC, set to miss year’s 75.24% contraction goal, talking sales

The main power utility PPC’s recall of a plan aiming to carve out and offer investors new retail electricity supply firms with exisiting utility customers on board may be interpreted as an indirect admittance of its failure to achieve a bailout-required market share contraction target set for 2017.

PPC officials, speaking on the sidelines of an Economist conference held yesterday, noted that the establishment of an initial retail supply firm could soon go ahead with approximately 500,000 utility customers on board, representing 7 percent of its market share.

According to these PPC sources, additional supply firms could then be formed and offered for sale until the state-controlled utility reaches its final market share contraction target, expected to drop to 50 percent by the end of 2019.

Legal issues and necessary revisions concerning the plan may be easily overcome, these sources contended.

The PPC plan entails establishing new supply firms and then extending offers to customers, through letters, for moves to these new entities in exchange for electricity tariff discounts. Customers who reject the offer would be excluded from the effort.

Though the energy ministry has not raised objections to the plan and intends to make necessary revisions, the ultimate aim is to gain the approval of the country’s lenders, the PPC sources told.

Greek officials can be expected to resort to this plan when negotiating with the lenders in an effort to soften the impact of PPC’s anticipated failure to reduce its retail electricity market share to 75.24 percent by the end of this year. The still-dominant utility’s market share has remained firm, currently standing at just over 85 percent. At best, this market share could drop to around 80 percent in the time remaining this year.

It is feared that the discrepancy could prompt the lenders to table alternative structural changes, meaning the sale of a considerable part of PPC.

Greek officials are also hoping PPC’s market share linked to high-voltage industrial supply can be excluded from the market share contraction equation.