PPC, requiring cash injections, reiterates need for tariff hikes

The main power utility PPC, facing relentless pressure ahead of an international bond payment obligation worth 350 million euros in May, is using every available opportunity to reiterate its need for electricity tariff hikes.

Commenting yesterday on PPC’s refinancing needs for the current year, PPC officials indicated the utility would need to resort to existing cash reserves to service the maturing international bond if it fails to access capital markets by May. Pundits have interpreted this as an indirect reference to the need for tariff hikes.

A month earlier, PPC’s chief executive Manolis Panagiotakis linked the utility’s need for tariff increases with an effort to improve its finances before heading to capital markets.

Energy minister Giorgos Stathakis, mindful of upcoming elections, has strongly rejected any tariff hike plans by the state-controlled power utility, but appears more lenient towards a reduction of a 15 percent discount offered to customers paying their electricity bills on time.

If PPC ends up not increasing its electricity tariffs, as appears most probable, it will need to postpone a planned bond issue. Despite this threat, an international road show intended for this issue’s promotion may be launched next month, PPC officials informed yesterday.

PPC has faced sharply increased operating costs over the past year or so. Wholesale electricity prices have reached levels of more than 80 euros per MWh, up from 53 euros last year. This includes the cost of CO2 emission rights purchased by PPC for its lignite-fired power stations, which have skyrocketed to 25 euros per ton from just 5 euros per ton in 2017.