The main power utility PPC is building a case that will seek to persuade sector authorities to increase the NOME auctions starting price, contending the current level does not reflect the utility’s operating costs.
This effort was implied last week by corporation officials at the energy ministry handover ceremony. It was reiterated yesterday during a meeting between Genop, PPC’s main union group, and the newly appointed energy minister Giorgos Stathakis.
Afterwards, Genop released a statement noting: “Mr. Stathakis has acknowledged the importance of the issue and the detrimental effect of the NOME auctions on PPC. He will take initiatives, in association with related agencies, so that the starting price reflects the utility’s operating cost more objectively.”
The NOME auctions, intended to provide third parties with access to PPC’s low-cost lignite and hydropower sources as a measure to help break the utility’s market dominance, were introduced last month.
The inaugural auction’s low starting price and subdued bidding thoughout the session guranteed low purchase prices for participants, who walked away feeling satisfied. PPC officials were not pleased.
The utility wants to avoid an immediate resetting as it fears the possibility of lower carbon emission right costs could pave the way for a further starting price reduction. Last month’s starting price was set at 37.37 euros per MWh.
As noted by PPC officials, the utility is already hard at work to prove this level is below PPC’s cost. PPC also plans to push for a revision to the formula used to determine the NOME auction starting price.
A second NOME auction may be held in December but officials are considering postponing the session as amounts acquired at last month’s inaugural session have yet to be fully absorbed.
PPC’s case for higher NOME starting prices will need to be accepted by the new energy minister, or endorsed by a court, if the level is to be raised. The energy ministry is responsible for future revisions, based on advice provided by RAE, the Regulatory Authority for Energy.