Competition Committee

Competition committee checks power pricing suspicions

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RAE, the Regulatory Authority for Energy, has identified electricity pricing irregularities for all consumer categories that need to be inspected, the authority’s head official Athanasios Dagoumas has told a news conference.

The country’s vertically integrated energy groups are RAE’s main concern, while the authority has already forwarded related data to the competition committee, which has the authority to investigate whether dominant players are applying abusive pricing practices.

RAE is closely cooperating with the competition committee, while the two entities have formed a working group for the matter, according to Dagoumas.

Competition committee staging retail electricity market inquiry

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The country’s competition committee is conducting a market inquiry that requires all electricity retailers, 18 in total, to respond to an extensive series of questions concerning their low-voltage supply activities by the beginning of the new year.

The committee questions include questions on company revenues generated by low-voltage sales during 2020 and 2021, for all consumer categories, namely households and small businesses.

The companies have also been requested to provide details on low-voltage products offered, fixed-tariff offers, frequency of tariff revisions, as well as the average life of new products offered.

A number of questions also concern details on tariff adjustment clauses applied by suppliers to electricity bills.

The inquiry does not presume suppliers have been engaged in non-competitive practices, the competition committee has pointed out.

 

PPC’s rise prompts response of rivals over hydropower control

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The rising number of customers returning to power utility PPC is triggering a response from rival independent electricity producers and suppliers, some of which, according to sources, are set to raise competition concerns with Greek and EU authorities by noting the utility’s exclusive use of the country’s hydropower facilities puts it in an advantageous position as profit generated from this activity is, to a great extent, being utilized for an aggressive pricing policy, helping win back customers.

This is not the first time PPC’s exclusive use of Greece’s hydropower capacity is being brought to the fore. On the contrary, it has always been on the European Commission’s agenda, especially during the previous decade’s period of Greek bailout negotiations, and was incorporated in related reports.

However, concerns over PPC’s lignite monopoly and how this matter should be tackled, which led to the introduction of NOME auctions, now abolished, followed by a recent agreement for PPC lignite packages to rivals, have taken precedence.

It seems the hydropower matter has now reached the tipping point for PPC’s rivals, facing toughened market conditions shaped by the energy crisis.

A number of independent producers are believed to be set to forward market data to RAE, the Regulatory Authority for Energy, as well as the domestic and European Commission competition authorities, to highlight their disadvantageous positions and call for intervention.

Committee checking relevance of DEPA gas auction measure

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The Competition Committee is conducting research to determine whether gas auctions that have required gas utility DEPA to make available minimum gas amounts to suppliers for fairer competition are still necessary amid the liberalized market.

The committee imposed these gas auctions on DEPA in 2014 when the utility was dominating Greece’s natural gas market under completely different market conditions.

Much has changed since the sector’s liberalization. A total of 7 gas importers and 25 retail suppliers are now active in the Greek market.

The study was prompted following a request by DEPA. As part of the process, the competition committee is consulting gas companies as well as RAE, the Regulatory Authority for Energy, before deciding if the gas auctions should be abolished.

According to sources, RAE pointed out that, given DEPA’s greatly reduced market share – less than 40 percent in 2019 and the first half of 2020 – the measure’s maintenance, without any benefits for the utility in exchange, offers rival gas companies an advantage.

RAE supports that any such measures must be universally imposed on all gas suppliers based on certain criteria, such as market share levels.

In addition, price levels at the DEPA gas auctions are deemed too high by players, limiting buying interest.

At the time of the gas auction measure’s introduction, in 2014, DEPA was obligated to offer other players 10 percent of the annual gas amount it was importing. This figure was gradually increased, reaching 17 percent in 2018.

Greek law initially required any gas wholesaler with a market share of more than 60 percent to make gas quantities available to other traders through auctions. This level was reduced to 40 percent in 2018.

RAE, competition committee set to establish closer ties

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RAE, the Regulatory Authority for Energy, is set to sign a memorandum of cooperation with Greece’s Competition Committee for more effective coordination and monitoring of the market.

RAE’s newly appointed chief executive, Thanasis Dagoumas, took the initiative to propose closer relations between the two authorities. The Competition Committee appears to have responded favorably. Its leader, Giannis Lianos, has met with the new RAE chief, while the two officials are believed to have agreed to soon sign an agreement for cooperation.

RAE and the competition committee will retain their responsibilities, as stipulated by law, but will seek greater coordination and collaboration on closely related matters involving both authorities.

Meanwhile, officials are also working to establish a network linking all the market’s independent authorities, including the National Committee for Telecommunications and Post Offices, RAE, the Competition Committee, as well as the regulatory authorities for the country’s ports and railways. Further collaboration, joint action and exchange of knowhow is being sought through this initiative.

In addition, Dagoumas, the new RAE boss, plans to soon meet with the leadership at ACER, Europe’s Agency for the Cooperation of Energy Regulators, signaling the Greek authority’s willingness to adopt a more extroverted role.

The new RAE administration is keen to participate in the decision-making process for Balkan and European matters, not just implement EU directives and ACER decisions, Dagoumas recently told Greek Parliament’s permanent committee on institutions and transparency.

DEPA’s EPA Attiki takeover a competition woe, officials react

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Unfavorable results produced by gas utility DEPA’s most recent gas release auction, which sparked a surge in prices and severely limted amounts made available to independent suppliers, have sparked protests by market officials over a recent Greek competition committee decision approving DEPA’s acquisition of a 49 percent share held by Shell in their EPA Attiki supply venture, covering the wider Athens area.

The agreement gives DEPA, already holding a 51 percent stake, full control of the EPA Attiki supply firm and threatens to keep independent players out of the retail gas market.

The threat had been raised during Greek competition committee hearings ahead of the agreement’s local approval. Officials who opposed the DEPA-Shell agreement warned it would prompt market competition complications but were told EPA Attiki was headed for privatization as part of the DEPA sale.

However, the DEPA sale has been held back by a series of deferrals. It could take many more months to stage. During this time, retail gas market competition will remain subdued.

Despite the warnings and market issues now emerging, the Greek competition committee offered a swift and unconditional approval the DEPA-Shell agreement.

DEPA’s gas release auctions were introduced as a structural plan to promote market competition and reduce the gas utility’s market dominance.

The main power utility PPC secured the biggest amounts at DEPA’s most recent gas release auction. The gas amounts left for independent players were also severely restricted by substantial purchases from EPA Attiki, now fully controlled by DEPA.

Commenting on the resulting set up, one market official described the situation as DEPA selling gas quantities intended for independent players to itself.

Authorities are now expected to scrutinize the issue.

DEPA set for more ambitious Athens network growth plan

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The gas utility DEPA appears determined to adopt a more ambitious development and investment plan for its Athens networks now that the local Competition Committee has approved its agreement with Shell for an acquisition of the latter’s 49 percent share in their EPA Attiki supply and EDA Attiki distribution ventures, both covering the wider Athens region. DEPA already holds majority 51 percent stakes in both.

The leadership at DEPA considers the existing EDA Attiki development plan as being too weak, sources informed. The upgraded plan is expected to feature more ambitious projects in areas already covered as well as new projects in new territory.

The current five-year plan for EDA Attiki limits the distribution network’s development to 35.5 kilometers by 2022, an average of 7.1 kilometers per year. It primarily concerns network construction in areas where networks already exist, for increased density, and neglects expansions into new areas.

Draft bill for DEPA’s sale-related split expected early December

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An energy ministry draft bill for public gas utility DEPA’s split into two companies, DEPA Infrastructure and DEPA Trade, as part of its privatization procedure, is expected to be submitted to parliament within the first ten days of December, following yesterday’s Competition Commission approval of the split.

The commission’s decision on the split, the final obstacle before stakes are offered to investors, may have come as relief to the energy ministry and DEPA’s board, but ministry officials, now penning the draft bill, remain undecided on jobs at the gas utility and its subsidiaries.

DEPA’s own team is not so much of a concern. The ministry’s job concerns are mostly focused on the futures of some 150 sub-contractors working on a virtually permanent basis with DEPA and associated firms.

According to sources, the majority of DEPA staff wishes to be transferred to the split’s resulting DEPA Infrastructure company, to remain under the control of the Greek State.

According to Greece’s 2019 budget, submitted to parliament yesterday, a 14 percent stake of DEPA Infrastructure will be privatized along with a 50.01 percent stake of DEPA Trade.

“The basic idea is to split the company into two parts, offer a majority stake of the commercial division to a strategic investor and maintain the Greek State’s strong presence in the distribution network,” energy minister Giorgos Stathakis told reporters.

Competition Committee ruling on DEPA-Shell deal by Monday

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The local Competition Committee is expected to deliver a decision Monday on gas utility DEPA’s agreement to acquire Shell’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area. DEPA already holds the majority 51 percent in these arrangements.

Motor Oil opposed the agreement and called for its rejection by the committee at a lengthy hearing held yesterday, while DEPA supported its takeover initiative. The committee informed it will issue its ruling by Monday.

Former DEPA chief executive Theodoros Kitsakos, who was replaced several months ago, noted that a better deal could have been achieved as it was prompted by Shell’s decision to withdraw from the Greek market, adding EDA Attiki sale was not a bailout requirement.

The sale price agreed to – EBITDA profit multiplied by 7.5 – is excessive, according to Kitsakos, who also condemned a clause requiring DEPA to pay Shell interest payments until the sale agreement is finalized.

A committee decision is needed for DEPA’s privatization procedure, involving a company split, to continue.

The privatization plan entails selling a 51 percent stake of DEPA Trade, representing the utility’s commercial interests, and a minority 49 percent of DEPA Infrastructure, as the government wants the Greek State to maintain its control of the country’s gas networks.

Taxation, personnel transfer details delaying DEPA split plan

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Taxation details concerning a gas utility DEPA split plan ahead of its privatization are believed to be keeping energy ministry officials from reaching a final decision on the split’s formation, or whether the development will entail a full or partial split of utility networks for transfers of resulting stakes into a new DEPA subsidiary.

DEPA wholly owns gas distributor EDA Attiki and DEDA and also maintains a 51 percent stake in EDA Thessaloniki.

The split has been incorporated into a double-fronted privatization procedure of state-controlled DEPA’s infrastructure and commercial interests. The government is pursuing a course to maintain the Greek State’s control of DEPA infrastructure.

The shareholder make-up of the new subsidiary will be pivotal to the decision. It has yet to be decided if DEPA or its current shareholders, ELPE-Hellenic Petroleum (35%) and the Greek State (65%), will own this new subsidiary. The energy ministry is currently calculating which option could be preferable in terms of taxation.

Payroll matters concerning personnel transfers are also holding up the energy ministry. Employees at the gas utility’s EPA and EDA Attiki supply and distribution ventures have been on payrolls regulated by private-sector rules as a result of Shell’s 49 percent stake. Shell has agreed to sell this stake to DEPA.

The Competition Committee has rescheduled a meeting on the matter for tomorrow, three days sooner than originally planned.

 

Competition Committee ruling on DEPA-Shell deal at end of month

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Now a month into its full investigation of the DEPA gas utility’s local takeover agreement with Shell, the local Competition Committee appears most likely to require the entirety of a 45-day limit permitted for the procedure by law before delivering its decision towards the end of October, officials involved in the process have informed.

DEPA has agreed to acquire Shell’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area. DEPA already holds the majority 51 percent in these ventures.

The investigation of the DEPA-Shell agreement was deemed necessary as the deal could constitute an over-accumulation of power for DEPA.

The investigation is not believed to have produced any competition-related concerns so far. However, the committee’s board will ultimately have the final say as to whether DEPA will need to make any revisions or commitments before its takeover deal is endorsed.

A related hearing, part of the investigation, could be held next week. DEPA officials and any third parties that may be against the DEPA-Shell agreement will be summoned by the committee’s board for the hearing. Third parties with objections are not expected to emerge, developments so far have suggested.

The DEPA-Shell deal’s endorsement will pave the way for the DEPA privatization, its first step requiring legislation for a split of the gas utility into two corporations, DEPA Trade and DEPA Infrastructure.

 

DEPA-Shell agreement undergoing full investigation

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The local Competition Committee has decided to conduct a full investigation of the DEPA gas utility’s local takeover agreement with Shell, crucial for the outcome of the utility’s planned privatization.

The investigation is expected to make fast progress and should not exceed a 45-day limit set by law, sources noted. Prior to this latest development, it was believed the committee could deliver a decision by this week.

The DEPA privatization plan could he headed for trouble if the 45-day limit is exceeded, officials have warned.

The sale plan entails splitting DEPA into two corporations, DEPA Trade and DEPA Infrastructure, and then launching the privatization procedure in October or November.

The investigation of the DEPA-Shell agreement was deemed necessary because the deal could constitute an over-accumulation of power for DEPA, given the utility’s dominance as a gas supplier in the wider Athens market combined with its key role in the country’s wholesale gas market.

DEPA has agreed to acquire Shell’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area. DEPA already holds the majority 51 percent in these ventures.

It remains unclear if DEPA and Shell could be asked to revise the terms of their agreement.

Competition committee key to DEPA-Shell deal, utility privatization

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A Competition Committee decision on the DEPA gas utility’s local takeover agreement with Shell, crucial for the outcome of the utility’s privatization, could be delivered today.

DEPA and Shell have stuck a deal entailing the Greek utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area. DEPA already holds the majority 51 percent in these ventures.

Competition Committee officials are examining whether the DEPA-Shell deal would constitute an over-accumulation of power. The committee’s examination is focused on DEPA’s dominance as a gas supplier in the wider Athens market combined with its key role in the country’s wholesale gas market.

The time it will take to complete this examination will determine the ensuing DEPA privatization’s schedule.

The DEPA-Shell agreement is planned to serve as a basis for a plan to split DEPA into two corporations, DEPA Trade and DEPA Infrastructure.

According to TAIPED, the state privatization fund, a draft bill for DEPA’s split needs to be submitted to parliament in October, while non-binding bids in a tender for DEPA Trade, the first part of the sale, are planned for November.

A 50.1 percent stake of DEPA”s trading firm is expected to be offered to investors. The Greek State is expected to retain a 51 percent stake in DEPA Infrastructure.

Certain pundits do not expect the DEPA privatization procedure to be completed before the summer of 2019. Municipal, European Parliament and national elections are all due in 2019, which has raised fears of DEPA privatization delays.

Tougher inspection may delay DEPA-Shell deal, privatization

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A recent takeover agreement between Greek gas utility DEPA and Shell concerning the former’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area could be delayed, if not forced to change, by local Competition Committee concerns over the deal’s impact on market competition. Subsequently, a privatization plan for DEPA could also be delayed.

The committee is considering launching a full-scale inspection on the resulting accumulation of power the agreement with Shell would offer DEPA, already holding a 51 percent majority in these Athens supply and distribution ventures prior to the deal.

According to sources, the gas utility is expecting a committee decision, on whether to conduct an in-depth investigation or clear the deal, on September 17. Should a full-scale inspection be launched, the committee will have 90 days to deliver a decision. If this period elapses, then the DEPA-Shell agreement will be automatically approved.

In July, DEPA announced it had agreed to acquire Shell’s 49 percent in the EPA Attiki gas supply and EDA Attiki gas distribution ventures for 150 million euros.

On another front, the Greek gas utility’s withdrawal from the Zenith gas supply company covering the country’s north, through the sale, for 57 million euros, of a 51 percent stake in this venture to Italy’s Eni, previously a minority partner with a 49 percent share, has been endorsed.