PPC to sell unit with 400,000 customers on board, chief says

Main power utility PPC, facing a bailout-related requirement to drastically reduce its dominant market share, is planning to carve out a new supply company representing between six and seven percent of business with roughly 400,000 existing customers on board, which the utility anticipates will be ready for sale in September, CEO Manolis Panagiotakis has disclosed at an Economist conference in Athens.

“We believe that suppliers confronting the market strategically will respond to the offer,” Panagiotakis remarked.

In an indirect reference to the alarming level of unpaid receivables troubling PPC, now at over 2.3 billion euros, the utility’s boss contended that, over the years, the Greek State has exercised social, island, agricultural and taxation policies through PPC.

He added that the market was now distorted with production costs exceeding the System Marginal Price (SMP), meaning that PPC production is loss-incurring.

“Had such factors not existed, PPC’s [required] market share reduction would have been relatively painless,” Panagiotakis told the conference. “The share reduction process and implementation of NOME auctions need to be carried out with care. PPC must not be dealt a devastating blow, which would impact the market and economy,” he continued.

NOME auctions expected in September, will provide third parties with access to PPC’s low-cost lignite and hydropower sources.