unpaid receivables

New PPC payback plan seeks to stop exploitation by customers

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Power utility PPC’s revised installment-based payback program for customers behind on electricity bill payments, to be announced by the utility later today, is designed to stop qualifiers from entering but not honoring the system’s monthly payment commitments.

Until now, PPC customers with arrears have been able to exploit the existing payback program to avoid electricity supply cuts by providing a qualifying deposit but not following up with most or all of the ensuing monthly installments. If ousted, customers have been able to swiftly requalify only to do the same. This has served as a time-wasting tactic at the cost of PPC.

Under the new terms, customers ousted from the payback system will still be able to requalify, but not until a long period has elapsed, energypress sources explained.

The terms of the new and revised PPC plan, part on an overall effort by the utility to boost its revenues, include 24 installments and a deposit of less than 40 percent.

The new payback plan represents a second step in PPC’s restructuring effort. The first, implemented in the summer, featured a package of support measures worth 490 million euros. An upcoming third step will concern PPC’s new commercial policy through the launch of new and appealing products.

PPC, needing revenue boost, to launch revised payback plan

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Power utility PPC’s administration is set to announce a revised and simpler payback system for consumer debt settlement with the aim of maximizing the collection of unpaid receivables for a revenue boost.

The new installment-based payback plan, expected to be announced later today or tomorrow, barring unexpected developments, will be readily available for consumers behind on their electricity bill payments through an automated process via the PPC website or utility retail outlets.

Contrary to the current debt settlement procedure, application approvals are expected to be instantly processed.

According to sources, the amount that will be required to become eligible for the new payback plan will be less than 40 percent of the total amount owed.

The new debt settlement plan’s maximum number of monthly installments will remain unchanged at 24, sources added.

It will focus on PPC’s low-voltage customers – households, professionals and small businesses – totaling 6.8 million consumers.

Approximately one in three low-voltage PPC consumers, or 2.3 million, are behind on electricity bill payments for debt totaling 1.6 billion euros.

PPC’s unpaid receivables for all voltage-based categories, combined, total 2.79 billion euros. Of this amount, 2.45 billion remains unattached to the existing payback plan.

RAE examining PPC complaint for unexecuted power cut orders

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RAE, the Regulatory Authority for Energy is investigating a power utility PPC complaint made against distribution network operator DEDDIE earlier this month, according to which the subsidiary is not fully executing electricity supply cut orders concerning non-punctual consumers.

The authority began digging deeper into the case after DEDDIE officials claimed the operator is fully obeying PPC’s electricity supply cut orders.

PPC has complained the operator’s lack of cooperation is offering protection to tens of thousands of consumers seen, by the utility, as able but not willing to pay overdue electricity bill amounts worth hundreds of millions.

RAE is treating the matter very seriously as PPC has never before made such an official complaint against corporate group member DEDDIE.

According to PPC figures, 7,020 electricity supply cut orders – of 471,403 forwarded in 2018 – remain unexecuted and concern unpaid bills worth a total of 9.8 million euros.

PPC bond issue in January after rescue package measures

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Power utility PPC will delay a planned bond issue until early next year, most probably within January, once a series of rescue-plan measures have been implemented, energypress sources have informed.

Though current market conditions are ideal, as highlighted by the 10-year Greek Govt bond yield of between 1.5 and 1.7 percent, the power utility’s board would rather wait for the implementation of all measures included in its rescue package before proceeding with a bond issue in pursuit of low-cost capital from international markets.

A series of measures intended to bolster PPC will have been taken by early next year. PPC’s first-half results, expected along with a report by the power utility’s certified auditor Ernst & Young on September 24, will include all measures deemed necessary for the corporation’s restructuring.

The energy ministry is soon expected to take legislative action enabling public service compensation returns of approximately 200 million euros to PPC for 2011 as well as the termination of NOME auctions in October or November, a favorable prospect for PPC, which has been obligated to offer below-cost wholesale electricity to rivals through the auctions over the past few years.

Also, between October and December, PPC plans to securitize unpaid receivables concerning electricity bills overdue by at least 60 days to draw capital from foreign funds.

Furthermore, consulting firm McKinsey is expected to have delivered an updated business plan for PPC by the end of December.

All these initiatives, along with electricity tariff hikes, will be included in PPC’s bond issue prospectus to make the utility’s growth prospects as convincing as possible.

Firmer handling of electricity theft resulting in reduction

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Stricter measures and penalties imposed by distribution network operator DEDDIE/HEDNO to tackle electricity theft have produced encouraging signs of a slowdown, industry data has shown.

Twenty-three percent of consumers behind on electricity bill payments are settling their overdue amounts with one lump sum, while 87 percent are doing so through installments, Nikos Drosos, DEDDIE’s network users director, told a forum titled “Retail Electricity and Natural Gas Markets and Consumers”, staged by RAE, the Regulatory Authority for Energy, within the framework of the ongoing 84th Thessaloniki International Fair.

Some 60 percent of electricity bill debts are being serviced, 5 percent remain overdue, 15 percent are being examined and 20 percent are non-performing, latest data showed.

More effective documentation and firmer handling has led to greater compliance by offenders and a reduction of electricity theft cases, according to the DEDDIE official.

 

 

 

Tougher supplier switch rules for consumers being prepared

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The energy ministry is preparing to introduce tougher electricity supplier-switch rules for consumers with electricity bill arrears.

Some 83,000 former power utility PPC customers managed to find ways to abandon the utility while owing unpaid electricity bills worth a total of at least 164 million euros, industry data has shown. Worse still, the problem appears to be getting worse.

Besides PPC, independent suppliers are also experiencing the pinch of fleeing customers at a growing rate. The value of unpaid bills left behind by independent supplier customers has reached between two and three percent of total revenues, data has shown.

Though former energy minister Panos Skourletis had decided to toughen up on electricity supplier hoppers back in May, 2015, the current energy ministry, the PPC board and independent suppliers all believe the rules can be stricter.

Consumers running away from their electricity bill debts appear to be exploiting rule deficiencies discovered in supplier payback programs offering debt settlement through monthly installments. Once registered for these payback programs, consumers are able to switch suppliers.

In other cases, electricity consumers – especially enterprises – looking to vanish from supplier radars are changing tax file numbers.

PPC to up collection campaign, high-income customers targeted

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Power utility PPC, in financial trouble and desperate to improve its cash flow, is set to intensify its collection campaign for unpaid receivables concerning some 60,000 high-income consumers through the deployment of legal offices and any other available means.

This high-income consumer group, seen as capable but unwilling to meet its electricity bill obligations, owes PPC a total of 800 million euros, half the  unpaid receivables tally in the low-voltage category.

As part of the escalated effort, PPC officials will be provided with weekly progress reports offering details on the collection effort.

PPC wants DEDDIE/HEDNO, the Hellenic Electricity Distribution Network Operator, to take swifter and firmer action in interrupting power supply to the utility’s debtors.

“The distribution network operator must act faster. We can’t go on begging it to cut power supply to uncooperative customers,” a PPC source told energypress.

In July, PPC’s former boss Manolis Panagiotakis, replaced recently, publically criticized DEDDIE/HEDNO for being ineffective. Just a fraction of 300,000 PPC power-cut orders issued over a year were executed by the operator, he protested.

New PPC board, approved this week, needs to move fast

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Power utility PPC’s shareholders will approve the corporation’s new CEO, Giorgos Stassis this Thursday, initiating a crucial period for the struggling corporation, Greece’s biggest, in need of life-saving measures from the state-controlled company’s administration and government.

The details of PPC’s rescue plan must be finalized by September 15, ahead of a report from Ernst & Young, the utility’s certified auditor, expected on September 24. The report will feature observations on the utility’s first-half results. In the lead-up, PPC needs to convince of its potential for a rebound to avoid further unfavorable news from the auditor.

Details of measures aiming to accumulate a sum of 750 million euros for PPC have yet to be finalized, sources informed.

The measures will include an electricity tariff increase as well as the endorsement of a clause triggering hikes when CO2 emission right levels exceed upper limits.

The government wants to offset the tariff hike, expected to be about 10 percent, with a reduction of a RES-supporting ETMEAR surcharge included on electricity bills.

PPC is also expected to securitize unpaid receivables of between 1.5 to 1.7 billion euros, the target being to rake in 400 million euros. The first of two securitization packages is expected to be issued in September or October.

PPC is also anticipating 195 million euros in public service compensation (YKO) returns for 2011. A legislative amendment enabling RAE, Regulatory Authority for Energy, to proceed with the details is needed. Also, the government must decide whether the national budget or electricity consumers will cover the cost of this measure.

 

 

 

PPC’s new boss faces tough sprint until September 24

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Power utility PPC’s newly appointed chief executive Giorgos Stassis, preparing to officially assume his post on August 22, faces an enormous task comprised of a series of hurdles that will need to be cleared by September 24, when Ernst & Young, the utility’s certified auditor, is due to issue a new report on the utility’s financial standing.

Much will need to be accomplished over this one-month dash if the auditor is to leave out from the report unsettling news on the power utility’s sustainability.

The new PPC boss will need to strike a fine balance in order to increase electricity tariffs, needed to boost the utility’s revenues, without burdening consumers, the idea being to offset these tariff hikes by reducing a RES-supporting ETMEAR surcharge included on electricity bills. However, this could prove tricky as renewable energy producers, too, must not be affected.

It remains to be seen if the collective cash inflow of the upcoming measures will be enough to stabilize PPC.

State-controlled PPC is anticipating a series of cash injections endorsed by the government, including a 190 million-euro return for public service compensation (YKO) concerning 2011.

Also, PPC also intends to securitize unpaid receivables worth 2.7 billion euros. This securitization plan, shaped by PPC’s previous administration, could lead to collections of between 400 and 500 million euros, but they are not expected to start coming in until October.

The electricity tariff increase, which could be around 10 percent, would boost PPC’s annual turnover of 4.7 billion euros by 450 million euros. The hike will most likely be implemented in September, meaning just 110 million of this amount would be injected into PPC’s coffers by the end of this year.

 

 

PPC tolerance for high-profile debt over, confiscations on way

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Power utility PPC, burdened by unpaid receivables worth 2.7 billion euros, appears to have run out of patience with customers owing sizable electricity bill amounts despite having been assessed as financially capable, if not affluent.

The utility intends to set an example by pushing ahead with a high-profile case involving the owner of a 972 square-meter mansion in Kifissia, an up-market northern suburb of Athens, who will face asset confiscation procedures if a 24,000-euro amount owed to PPC is not settled immediately.

The owner of this property has ignored related court decisions and also applied illegal means to qualify for a subsidized electricity program (KOT) normally reserved for underprivileged households.

The case was disclosed by PPC’s outgoing chief Manolis Panagiotakis in 2017.

An investigation launched by PPC a couple of years ago led to the discovery of many other such cases involving property owners in various up-market parts of Athens who have secured unwarranted electricity bill subsidies and refused to pay bills.

Some 60,000 households are responsible for 800,000 euros of PPC’s unpaid receivables, the newly appointed energy minister Costis Hatzidakis noted recently while presenting his ministry’s program.

 

Minister to set tougher power bill collection terms for dodgers

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Power utility PPC customers seen as able but unwilling to pay their electricity bills can expect stricter terms, expected to be included in a package of new policies to be announced in Greek Parliament this Sunday by the recently appointed energy minister Costis Hatzidakis.

The minister will aim for a drastic collection record improvement at PPC, currently burdened by poor finances. The power utility’s more ruthless approach will need to be implemented by the power utility’s next administration.

Manolis Panagiotakis announced his resignation from the state-controlled power company’s top post shortly after the July 7 election.

Though strategic electricity bill dodgers are expected to be shown no further tolerance, struggling households should keep receiving subsidized support under the new program, it is believed.

PPC’s unpaid receivables, including monthly-installment payback programs, have reached 2.7 billion euros, an enormous sum given the size of the power utility and Greek economy.

Of this total, 800 million euros, slightly less than a third, is owed by 60,000 individuals who are not living in poverty, but, on the contrary, are affluent, Hatzidakis, the energy minister, told local media yesterday.

PPC to implement VAT reduction retroactively as of May 1

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Power utility PPC will retroactively implement a VAT reduction for electricity bills, from 13 percent to 6 percent, as of May 1 rather than a May 20 starting date set by related legislation, PPC sources have informed.

PPC’s administration is anticipating an improved collection record for its unpaid receivables as a result of the VAT rate reduction on electricity. The unpaid receivables figure at PPC is currently estimated to be 2.5 billion euros.

Electricity consumers across the board are expected to collectively save approximately 270 million euros as a result of the VAT rate reduction.

As the dominant electricity retailer, PPC, serving roughly 7 million customers, constitutes the biggest chunk of this total amount. Its customers stand to save approximately 210 million euros.

On an individual level, PPC customers can expect to each save over 50 euros per year, according to PPC chief executive Panolis Panagiotakis.

The reduced 6 percent VAT rate applies to all surcharges included in electricity bills except for municipal charges.

 

Major-scale consumers to benefit most from energy VAT rate cut

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A rate cut for VAT imposed on electricity and natural gas, down to 6 percent from 13 percent, announced yesterday by Prime Minister Alexis Tsipras, stands to primarily benefit major-scale consumers and will pass as a minor cost reduction for most households, energy supply firm officials have determined.

Households consuming higher energy amounts and industrial firms can expect a noticeable cost reduction, officials commented, while pointing out that businesses will mostly see a cash-flow improvement as their VAT inflow and outflow is offset.

The measure’s impact on main power utility PPC customers paying their electricity bills on time will be minimal as the VAT cut will more or less balance out higher costs prompted by a recent company decision to reduce the utility’s punctuality discount to 10 percent from 15 percent.

Given the Greek electricity market’s annual turnover, totaling an estimated 5.4 billion euros, the VAT reduction promises electricity consumers annual savings of about 270 million euros. As for the natural gas market, the tax cut is expected to offer household consumers annual savings of between 12 and 14 million euros.

It remains to be seen if this VAT rate cut can lead to any improvement of energy bill payment records, especially at PPC, facing a massive unpaid receivables problem. Sector officials are doubtful as the tax revision offers minimal energy cost savings for household consumers.

PPC’s introduction of its 15 percent punctuality discount in July, 2017, a measure that emerged as a far greater incentive than the just-announced VAT rate cut, did not improve the power utility’s collection record.

PPC to seek financing through SPVs securitizing receivables

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The main power utility PPC is expected to turn to funds for financing with the securitization of unpaid receivables worth 1.5 billion euros serving as security. The power utility anticipates it will borrow roughly 400 million euros through the procedure.

PPC’s chief executive Manolis Panagiotakis outlined the power utility’s borrowing plan on the sidelines of an annual conference held by HAEE, the Hellenic Association for Energy Economics.

The plan, according to Panagiotakis, will include the establishment of two PPC-owned special purpose vehicles representing unpaid receivables of two categories, one pending payments that have been delayed by between 60 and 89 days, the other by more than 90 days.

The SPV carrying unpaid receivables of between 60 and 89 days is expected to be more appealing for funds as it entails less risk.

Amounts to be attached to coupons and loan durations are currently being discussed, sources informed.

The two SPVs are expected to be ready within the summer, according to Panagiotakis. PPC officials are currently preparing a virtual data room for prospective investors as well as technical and financial appraisals of unpaid receivables to be securitized.

The influx of a 400 million-euro amount anticipated from this effort is expected to offer the power utility significant cash-flow relief.

Unpaid receivables concerning low-voltage household and business consumers are expected to be targeted.

 

PPC relying on three big cash injections, one already through

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The Greek State’s discount-securing prepayment of a 550.7 million-euro sum to the main power utility PPC for the year’s electricity consumption by all national, regional and local government authorities, made on March 7 following a finance ministry order, according to local media, is the first of three cash injections expected to offer major financial relief to the power utility.

PPC is planning to securitize unpaid receivables, which will be offered as collateral for two bond issues, being organized by Deutsche Bank and Finacity. These are expected to raise at least 300 million euros.

The power utility has also relaunched an older quest for the return of a public service compensation (YKO) amount worth about 700 million euros and concerning the year 2011. PPC had been lawfully deprived of this amount but insists it was treated unfairly. The power utility has begun related talks with RAE, the Regulatory Authority for Energy, already believed to be tilting towards PPC, and the government. This effort could bring the national budget into the picture for a lump sum payment to PPC.

As for the 550.7 million-euro prepayment already received by PPC for the Greek State’s overall electricity needs in 2019, the utility intends to use about 150 million of this amount to help service a 350 million-euro bond payment maturing at the end of April, chief executive Manolis Panagiotakis has informed. The remaining 200 million-euro amount is expected to be covered through bank loans.

European Commission advises PPC to intensify debt hunt

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The main power utility PPC needs to intensify its unpaid receivables collection effort, the European Commission has stressed in its first post-bailout report.

PPC should focus on consumers owing two electricity bills or more, the Brussels report has pointed out, while also recognizing the progress made as a result of the power utility’s ongoing hunt.

PPC should keep pursuing customers who have transferred to other electricity suppliers, the report notes. It is estimated PPC is owed between 770 million and 780 million euros in unpaid receivables by this consumer category, older data has shown.

This group remains a main concern for the utility along with consumers who have somehow managed to change tax file numbers and disappear from PPC’s radar.

PPC’s unpaid receivables total 2.39 billion euros, of which 1.7 billion concerns the low-voltage consumer category of households and small businesses.

The unpaid receivables figure for the mid-voltage category, made up of small-scale manufacturers and businesses, totals 150 million euros. PPC’s high-voltage industrial consumers owe 378 million euros, with the troubled state-owned nickel producer Larco, alone, owing 285 million euros of this total. The Greek State owes PPC 201 million euros.

One third of PPC’s 7.1m consumers behind on power bill payments

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A sweeping campaign launched by the main power utility PPC with the aim of reducing overdue electricity bill amounts owed by consumers through extrajudicial initiatives, power supply cut threats and pressure for monthly installment payback arrangements has reduced the utility’s unpaid receivables sum by approximately 140 million euros during the first seven-month period of 2018.

This result remains unsatisfactory given the alarming size of PPC’s unpaid receivables sum.

A total of 390,000 power-cut orders concerning overdue electricity bills worth a total of 630 million euros needed to be issued by PPC between January and July this year before it could collect the 140 million-euro amount.

A total of 150,000 of these power-cut orders were followed through. Households eligible for subsidized electricity through the Social Residential Tariff (KOT) program may have been among the affected, even though they are normally protected from power supply cuts.

PPC reported an unpaid receivables reduction in its presentation of first-half results, down to 2.399 billion euros on July 31 from 2.536 billion euros at the end of 2017. The amount concerns 2.3 million supply connections, nearly one third of PPC’s 7.1 million in total. Some 1.5 million consumers owe amounts of up to 1,000 euros.

Many consumers being pursued by PPC for unpaid power bills have switched suppliers or changed tax file numbers, which has made the chase more difficult. One quarter of PPC’s customers are registered on the company’s books without tax file numbers. It remains unclear how this was achieved.

PPC, facing €3.5bn unpaid bills amount, boosts collection effort

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Intensifying its debt collection effort over the past month, the main power utility PPC, whose unpaid receivables figure has reportedly risen to over 3.5 billion euros, has ordered some 340,000 customers to settle unpaid electricity bills and plans to soon forward thousands more payment orders, all signed by legal officials.

Consumers who have failed to make payments over two consecutive four-month billing periods are being targeted, regardless of amounts, sources informed.

The initiative has drawn many household and business consumers to the power utility’s outlets for immediate settlement of unpaid amounts or, most commonly,  payback program arrangements not exceeding 24 monthly installments.

Payback plan terms being offered to customers are not standardized but shaped in accordance with individual customer profiles and track records.

Debt collection services firm Qualco, hired by PPC for unpaid receivables support, has joined the effort by sub-contracting fellow debt collection and law firms to notify customers of their electricity bill arrears. Qualco has pledged to collect 450 million euros for PPC over the next nine months.

A PPC business plan prepared by consulting firm McKinsey has set a debt collection target of between 690 million and 1.1 billion euros.

 

PPC now less tolerant in unpaid receivables collection effort

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The main power utility PPC, struggling to cope with unpaid receivables of 2.77 billion euros, more than 50 percent of last year’s total turnover figure, has reduced its tolerance level and is now issuing power supply cut orders for consumers owing 500 euros or less.

Until recently, the power utility kept away from consumers owing electricity bill amounts up to 1,000 euros. To their surprise, PPC customers of this category have had to deal with power supply cut orders over the past month and a half.

Consumers who have missed out on servicing one or more monthly payback installments are among those targeted by PPC. In many cases, consumers have signed up for payback agreements in order to reinstall power supply only to stop honoring the arrangement soon after.

PPC is also hunting down customers who have employed an incredible array of tricks to remain elusive – including property transfers to other names.

Moreover, the power utility is pursuing households found to have been providing false information to qualify for subsidized electricity, reserved for vulnerable groups through the Social Residential Tariff (KOT) account. In some cases, multi-member families have provided false age information on children to qualify for KOT subsidies, PPC has determined. Family members aged as high 30 have been presented as underage children, the power utility found.

PPC’s more aggressive power supply cut policy is not linked to the work of Qualco, the debt collection services firm hired by the power utility to ease its unpaid receivables problem.

Qualco has so far raked in 25 million euros of unpaid receivables for PPC from a total of approximately 180 million euros owed to the utility by 65,000 customers selected for a pilot program awarded to the debt collector, according to details presented at PPC’s most recent board meeting a few weeks ago.

PPC’s initial collection target for the year is believed to have been set at at least 100 million euros. Qualco is believed to have promised to collect a further 450 million euros over the next nine months.

Higher guarantees for new power links needed to mitigate risk, PPC counters

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The main power utility PPC has decided to increase the minimum level of guarantees demanded from consumers applying for new electricity supply contracts as a result of increased public service compensation (YKO) and RES-supporting ETMEAR surcharges included on bills, the power utility has noted in a response to an MP enquiry.

This guarantee payment increase, implemented as protection from the elevated risk presented by non-punctual customers,  could have been higher, PPC added.

Based on the existing terms, PPC has, until now, demanded guarantees from new customers worth the equivalent of two electricity bills with nominal values of 130 euros each, but has determined the amount is no longer sufficient and does not reflect actual market conditions.

In its response, PPC also noted it is striving to limit the level of overdue electricity bills owed by customers, a major concern for the power utility in recent years. PPC’s unpaid receivables figure is currently estimated to be worth 2.77 billion euros.

 

 

PPC faces 30% loss of unpaid receivables, consumers gone

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The main power utility PPC’s inability to lower its alarming unpaid receivables figure, estimated at 2.77 billion euros, more than half the power utility’s total turnover in 2017, highlights that the company has been struck by yet another wave of bad-debt customers.

Thousands of vanished-category customers have not only failed to reduce amounts owed to the power utility but increased the overall amount owed to PPC by this category from roughly 413 million euros a year and a half ago to 800 million euros at present. This figure stood at 700 million euros in February, meaning it is on an upward trajectory.

These debt amounts have been created by customers who have either interrupted power supply to holiday homes not being used or shifted to new suppliers, while, in addition, turned to various tricks to vanish from PPC’s radar.

Methods applied have included tax file number changes, an approach that has helped PPC customers with arrears avoid market rules and break free to new suppliers, according to the debt collection services firm Qualco, hired by PPC for support.

PPC has reported an official unpaid receivables figure of 2.42 billion euros, but the addition of 350 million euros concerning 354,000 customers who have registered for debt settlement programs through monthly installments increases this sum to 2.77 billion euros.

PPC and its hired support team now need to decide whether the 800 million-euro debt amount owed by vanished customers should be written off as bad debt. This is not an easy decision to take as the sum represents roughly 30 percent of the power utility’s official unpaid receivables figure.

PPC unpaid receivables steady at €2.77bn, Qualco nets €25m

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Debt collection services firm Qualco has so far raked in 25 million euros of unpaid receivables for the main power utility PPC from a total of approximately 180 million euros owed to the utility by 65,000 customers selected for a pilot program awarded to the debt collector, the power utility’s chief Manolis Panagiotakis has told the board at a meeting held to discuss extending Qualco’s contract.

Though Panagiotakis indicated the results are satisfactory, the level of PPC’s unpaid receivables has remained stubbornly high, dropping only slightly since the beginning of the year.

According to official data believed to have been presented by the PPC boss at yesterday’s board meeting, low-voltage customers (houses, small shops) owe a total of 1.7 billion euros; mid-voltage customers (small-scale industries, businesses) owe 150 million euros; high-voltage customers (major-scale industries) owe 370 million euros; and the public sector owes a total of 200 million euros.

Though the total debt amount of these four consumer sub-categories adds up to 2.42 billion euros, a further 350 million euros concerning 354,000 customers who have registered for debt settlement programs through monthly installments also needs to be factored in. This additional sum brings PPC’s unpaid receivables sum to a grand total of 2.77 billion euros, virtually unchanged since the beginning of the year. This unpaid receivables figure constitutes over 55 percent of PPC’s total turnover, based on last year’s performance of 4.94 billion euros.

It is unclear whether modest debt collection gains made by PPC have been offset by new unpaid receivables.

Some 800 million euros of the 2.77 billion-euro unpaid receivables sum are owed by customers who have either shifted to new suppliers or disrupted their electricity supply for a variety of reasons (holiday home cutbacks, business closures etc).

According to sources, an extension of Qualco’s contract would commit the debt collector to net a further 450 million euros for PPC over the next nine-month period. If this target is achieved, then the debt collector’s fee is expected to increase by 50 percent from the initial contract’s 12 million euros to 18 million euros, the sources informed.

The next update on the power utility’s debt collection effort is scheduled to be presented at a PPC board meeting in September.

 

 

PPC board to discuss extending Qualco debt collection contract

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The main power utility PPC’s board is expected to discuss extending its contract with debt collection services firm Qualco, hired to help to reduce the utility’s level of unpaid receivables, currently estimated at 2.4 billion euros.

Qualco’s initial effort, launched as a pilot program for approximately 100,000 to 120,000 PPC customers, is expected to be broadened to reach about two million.

PPC has expressed mild satisfaction with the debt collection services firm’s results so far.

Reducing the unpaid receivables level represents PPC’s biggest challenge this year as the effort’s outcome is not only crucial for the utility’s sustainability but also its ability to keep offering a generous electricity bill discount to punctual customers, chief executive Manolis Panagiotakis has pointed out.

Qualco is expected to exceed its unpaid receivables collection target of 50 million euros this year and rake in 150 million euros, projections have indicated.

 

 

 

 

PPC customers not meeting payback terms, 15% discount policy at risk

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A considerable portion of main power utility PPC customers who have resorted to payback programs for electricity bill arrears, serviced through monthly installments, are failing to meet the terms of their arrangements, according to a power utility annual report.

This could impact the future of a 15 percent discount offered by PPC to its punctual customers. The power utility’s collection record concerning unpaid receivables and the discount’s future availability are correlated, Manolis Panagiotakis, PPC’s chief executive, noted on the sidelines of a recent shareholders’ meeting.

The power utility boss also admitted fearing that a disruption of PPC’s current discount policy could lead to a rise in the number of consumers not able to cover electricity bills.

Updated data concerning PPC’s unpaid receivables should provide further clarity on the dilemma faced by the power utility.

 

PPC considering CO2 right cost risk hedging, arrears securitization

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The main power utility PPC plans to adopt risk hedging practices in order to limit the uncompensated impact of fluctuating international CO2 emission right prices, which, in recent times, have risen to levels representing a considerable part of the utility’s overall electricity production cost.

PPC’s first quarter results, posted this week, showed that its CO2 emission right costs increased by 22.9 percent despite an 18.5 percent reduction of lignite-based electricity production and a 54.5 percent hydropower output increase.

Earlier this week, PPC’s board decided to set up a specialized team to systematically monitor the European market, buy CO2 emission rights at relatively lower prices and utilize resulting reserves to cover needs when price levels are high, PPC’s boss Manolis Panagiotakis has informed.

PPC is also considering the prospect of securitizing amounts owed by customers as a means of creating an additional cash flow source. Consultants hired by PPC have already conducted an unpaid receivables management study.

Qualco debt collection test run on PPC customers successful

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A pilot program staged by debt collection services firm Qualco, hired by the main power utility PPC for support in its effort to reduce its unpaid receivables, has produced favorable results with many participating customers either agreeing to monthly installment payback terms for electricity bill arrears or settling outstanding amounts.

Thousands of PPC customers were contacted by Qualco via telephone calls, the debt collection services firm’s objective being to test a plan it intends to implement on a wider scale.

Prior to launching this test run, Qualco categorized PPC customers based on criteria such as occupation, past behavior, location and electricity consumption patterns.

The debt collection services firm adopted a mild approach when contacting PPC customers and did not resort to legal threats of any form, according to sources.

Qualco’s pilot program was staged over a two-month period and involved approximately 120,000 PPC customers with arrears.

PPC’s need to reduce its unpaid receivables figure, currently at an alarming level of at least 2.3 billion euros, was added as a term to the latest bailout update. The country’s lenders view punctualty in electricity bill payments as essential for a balanced electricity market.

A target collection figure set by Qualco for this year, believed to be 50 million euros, will most likely be tripled, according to a projection made by the debt collection firm.

The country’s four main banks are also involved in this PPC unpaid receivables collection effort. It is believed they will seek to secure amounts collected for the servicing of a 1.3 billion-euro joint loan extended to the power utility.

PPC has just announced it is toughening the terms of its existing payback program, based on deposit payments followed by monthly installments.

 

Electricity theft, unpaid receivables continue to plague PPC’s cash flow

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Electricity theft and unpaid receiables are continuing to severely affect the main power utility PPC’s cashflow, related figures published yesterday by the super privatization fund have highlighted.

Electricity theft has risen by 270 percent since 2011, when unbilled consumption was estimated to be worth 359 million euros. This figure rose to 970 million euros in 2016, the figures showed.

The biggest rise in electricity theft was experienced in 2014, when unbilled electricity consumption rose to 826 million euros from 600 million euros. In 2015, unbilled electricity consumption rose by 138 million euros, to 964 million euros from 826 million euros.

As for bad debt forecasts, the figure rose from 634 million euros in 2011 to 2.766 billion euros in 2016. The worst years were 2015, when the bad debt forecast rose by 867 million euros; 2013, when the forecast rose by 362 million euros; and 2016, when it rose by 346 million euros.

PPC loses track of 100,000 clients owing amounts in a year

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The main power utility PPC has lost track of some 100,000 customers owing electricity bill amounts over a year, between the end of 2016 and the end of 2017.

The utility’s vanished customers, who, most recently, have resorted to changing their tax file numbers, owe approximately 700 million euros to PPC. This 700 million-euro amount, which includes debt owed by firms that have been out of business for decades, represents roughly 30 percent of the utility’s unpaid receivables total.

PPC and debt collection firm Qualco, hired by the utility in November, are currently investigating the matter in an effort to get vanished customers back on the radar.

During the recession’s early days, PPC lost many customers who chose to interrupt electricity supply at properties not being used, but the tax file number changing initiative appears to be a new and more desperate way of cutting ties with the utility.

PPC officials and technocrats representing the country’s lenders held a meeting on Monday to discuss the power utility’s unpaid receivables issue, including debt owed by the Greek State, as well as the current collaboration between the power utility and Qualco.

The lender representatives showed no signs of preparing extraordinary measures, an energypress source informed.