Thermal producers, DEPA at odds over 2017 gas deal terms

Ongoing negotiations over the past few weeks between DEPA, the Public Gas Corporation, and most of the country’s independent gas-fueled electricity producers, in search of new annual gas supply deals for 2017, are proving especially difficult this year as a result of the unique conditions brought about by the current winter’s energy crisis.

Unprecedentedly, all major consumers are seeking maximum gas amounts, prompting DEPA to seek additional orders in order to meet demand.

In response, DEPA is seeking to include a clause in its new annual agreements with the thermal electricity producers that would enable the gas company to raise prices when demand remains high over extended periods and requires DEPA to pay higher amounts for its gas orders, including extraordinary LNG shipments through the spot market.

The thermal producers have already voiced their objections to such a prospect. They contend that existing agreements include clauses specifying the maximum daily and annual gas amounts DEPA is obligated to supply to each company. The existing agreements also include formulas determining price levels based on the types of gas DEPA receives from its steady suppliers.

All but one of the country’s thermal producers are currently engaged in talks with DEPA for new supply deals covering 2017. Heron is not involved as the producer has already signed a long-term agreement with DEPA.

The independent thermal producers, most of which renew their agreements with DEPA on an annual basis, also contend that they should not be treated differently to Heron and PPC, the Public Power Corporation, both holders of long-term agreements with the gas corporation.

Thermal producer company representatives told energypress that DESFA, the natural gas grid operator, should be responsible for managing the energy crisis, not DEPA, as it is a trading company, even if state-controlled.

It remains unknown when the gas-deal talks between for the thermal producers and DEPA will conclude. Agreements reached will apply retroactively as of January 1, 2017.

PPC to pay €400m to thermal, RES producers, court orders

The Council of State, Greece’s supreme administrative court, has ordered the main power utility PPC to provide 400 million euros to LAGIE, the Electricity Market Operator, covering an amount owed to thermal electricity and renewable energy producers as a result of offsetting practices pursued by the utility.

The verdict comes as a major financial setback for PPC, which has struggled to combat poor cashflow in recent years.

The Council of State rejected a PPC request made in 2013 that sought to nullify a decision reached by RAE, the Regulatory Authority for Energy, that prohibited PPC from practicing offsetting solutions for amounts owed to LAGIE and, by extension, thermal electricity and RES producers.

RAE had reached that decision following an initiative taken by independent electricity supplier Elpedison in 2013. An examination of the case found that PPC was resorting to offsetting measures, despite not being entitled to do so.

The 400 million-euro sum which PPC must pay LAGIE will then be relayed to thermal electricity and RES producers. These two sub-sectors are more or less entitled to an equal division of the amount.

According to sources, talks have already begun between PPC and LAGIE for payment of the amount through installments and not as a lump sum, which would be virtually impossible considering the power utility’s current finances.