RAE to impose NOME auction restrictions to counter abuse

RAE, the Regulatory Authority for Energy, appears determined to implement measures aimed at limiting NOME auction abuse by market players and accelerating the main power utility PPC’s retail electricity market share contraction for greater market competition.

In its monitoring of NOME auctions and ensuing sales, by participants, of electricity amounts to secondary markets over the past few months, RAE has noticed an accumulation of futures products disproportionate to customer base sizes and growth rates of certain suppliers and traders.

Subsequently, four companies were summoned by RAE to hearings. Three of these testified yesterday.

According to sources, the representatives of all three companies – traders and electricity suppliers holding small market shares – contended that they have not breached any market rules, while also noting NOME auctions have been staged without restrictions, as was requested by the country’s lenders.

These companies will need to follow up arguments offered at their hearings with related documents before RAE decides whether to hand out charges or not.

RAE has not been able to determine the exact amounts of electricity exported from Greece to other European markets, where wholesale prices are relatively higher, but has resorted to various tools monitoring the market and players, analysts noted.

The authority is preparing to introduce specific NOME auction regulations, including restrictions, sources informed.

During the bailout era, which has just ended, lenders, citing free market rules, did not want any restrictions imposed on Greece’s NOME auctions. However, the country’s lenders have, along the way, given RAE some leeway to take corrective action and counter ongoing abusive practices by NOME participants.

NOME auctions were introduced in Greece about two years ago to offer third parties access to PPC’s lower-cost lignite and hydropower sources.