PPC to receive bulk of public service YKO returns early on

Negotiations between the country’s lenders and government officials for a Public Service Compensation (YKO) retroactive return to the main power utility PPC, totaling 360 million euros and concerning 2012 to 2016, are progressing favorably for the utility.

Though PPC stands no chance of receiving anything over the aforementioned amount – the utility had originally demanded 735 million euros – it can expect to receive a considerable part of the 360 million euros in 2018.

It appears the negotiating sides have settled for a payment of 130 million euros to PPC in 2018 before the remaining sum is evenly divided over a four-year period covering 2019 to 2022.

According to sources, the 130 million-euro payment to be made to PPC in 2018 will stem from the budget’s primary surplus. Finance Minister Euclid Tsakalotos recently told parliament that a portion of the primary surplus would be used to service amounts owed by the Greek State to various enterprises and agencies.

Authorities needed to turn to the primary surplus as the lender institutions wanted to avoid burdening the 2018 budget despite insisting that PPC must receive its retroactive YKO sum.

The 360 million-euro payment’s remaining 230 million euros is expected to be covered by the budget.

An YKO surcharge is imposed on electricity bills to primarily subsidize high-cost electricity production on Greece’s non-interconnected islands and also support the Social Residential Tariff (KOT) program offering underpriviledged households subsidies for lower-cost electricity.