Pending issues crucial for industrial energy cost savings

A series of issues concerning prospective industrial energy cost savings that have surfaced either as industrial-sector requests or government announcements remain unresolved, creating insecurity within industrial circles.

New industrial electricity tariffs, currently being negotiated but with much ground still to cover for convergence, are at the very top of this list for industrialists.

One energy-intensive industrial producer has already abandoned power utility PPC after rejecting the industrial electricity tariff prices the utility had to offer.

Industrialists also want a public service compensation (YKO) surcharge reduction.

On another front, the sector expects a special consumption tax rate for mid-voltage industrial consumers with annual consumption levels of more than 13 GWh to be equated with the special consumption tax rate offered to high-voltage industrial enterprises. This revision, concerning approximately 170 factories, has been announced by Prime Minister Kyriakos Mitsotakis.

Another matter for the industrial sector concerns exempting major-scale industrial units from a series of additional electricity supply surcharges, in accordance with European Commission directives.

Industrialists also want a special consumption tax exemption on electricity used for mineral processing in cement and glass production, which would align Greek law with an EU directive from 2003.

The industrial sector is also anticipating a new mechanism to offset CO2 emission right costs.

Crete-Peloponnese subsea cable installation to start soon

Power grid operator IPTO plans to begin installing a 135-km subsea cable for the Peloponnese-Crete grid interconnection, part of a larger project to ultimately extend this line to Athens, within the next few weeks. The installation’s exact starting date will depend on the weather conditions.

Also, a subsea cable interconnecting the islands Naxos and Syros, the final step in the third phase of the Cyclades grid interconnection, is expected to be electrified next month, according to the operator.

The Peloponnese-Crete project, in particular, is pivotal in the effort to reduce public service compensation (YKO) surcharges for consumers. The interconnections will also help utilize the renewable energy potential of islands.

The Peloponnese-Crete subsea cable installation, made challenging by deep waters reaching 1,000 meters, will require about two months to complete, IPTO sources noted. It will be the world’s longest subsea cable grid interconnection.

Installation work for a second subsea cable (107 km, 150 kV) between Syros and seaside Lavrio, on the southeastern tip of the wider Athens area, was completed last month in preparation for the electrification of the Naxos-Syros line, expected early October. High-voltage testing, over a 24-hour period, will precede the line’s electrification.

Athens-Crete interconnection work commences at both ends

Work at both ends of the Athens-Crete grid interconnection, Greece’s biggest infrastructure project at present, has begun in earnest, power grid operator IPTO sources have informed.

In the lead-up, IPTO subsidiary Ariadne Interconnection, developing the project, and contractors signed contracts totaling approximately one billion euros last month.

Various preliminary studies and construction work are now underway. A high-voltage subsea cable is planned to run from Heraklion, Crete to Megara, slightly west of Athens.

Also, a converter station will be built close to the Cretan village Damasta.

A converter station will not be needed at Megara, on the Athenian side of the project. Instead, the interconnection’s line will run through an underground passage to reach a central unit, where the converter station will be installed.

IPTO has discussed the project with local communities to minimize any inconveniences. Requests made by locals, determined to conceal any visual impact, were taken into consideration by authorities when planning the project’s route.

Revisions were made to an environmental impact study approved by the energy ministry last April.

IPTO made significant changes for the Megara end of the interconnection, significantly increasing the operator’s budget for the project. Changes included the adoption of subterranean line passages. Similar-minded revisions have also been agreed to for the Cretan end’s Korakia area.

Once launched, the Athens-Crete grid interconnection promises to offer electricity consumers overall annual savings of 400 million euros in Public Service Compensation (YKO) surcharges, included in electricity bills.

The project will also offer major environmental benefits as CO2 emissions resulting from the overall electricity supply effort for Crete will be reduced by 60 percent once the Athens-Crete interconnection is fully launched.

This project represents Crete’s major-scale link. A preceding smaller-scale link from Crete to the Peloponnese has also been incorporated into the effort.

Industrial energy cost reduction measures planned, deputy tells

The government is preparing to reduce a special consumption tax for energy-intensive mid-voltage companies and also push through a series of other measures aiming to reduce industrial energy costs, deputy energy minister Gerassimos Thomas has revealed in an interview with Greek daily Kathimerini.

The deputy minister said he is confident a Greek proposal seeking extensions for the country’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM) will be approved by the European Commission.

The special consumption tax for energy-intensive mid-voltage companies will be reduced to the level offered to high-voltage companies, the deputy minister informed.

Also, a new public service compensation (YKO) mechanism offering benefits for high and mid-voltage industries will be introduced, he said.

Power grid operator IPTO needs to design and launch new demand response products in compliance with EU directives, the deputy minister noted while addressing the forthcoming launch of the target model in Greece.

The objective is to provide incentives to private-sector producers and industry for equal participation in the balancing and energy markets, he explained.

 

 

Tough recovery path for PPC, public service sum slight relief

An announcement in parliament yesterday by finance minister Hristos Staikouras for an upcoming payment to power utility PPC of 200 million euros in public service compensation (YKO), being covered by the state budget and concerning services prior to 2011, signals the beginning of a marathon recovery effort by the utility, needing to cover a 900 million-euro cash deficit.

The size of the company’s cash deficit figure, disclosed last summer by energy minister Costis Hatzidakis and PPC chief executive Giorgos Stassis, promises some financial improvement but the power utility still has plenty of ground to cover to eliminate all fears of collapse.

The imminent 200 million-euro payment to PPC, expected to be received the by the end of January, must, according to latest law, be preceded by action from RAE, the Regulatory Authority for Energy, specifying amounts owed to the corporation. The finance ministry will then give the green light for the payment’s execution.

PPC is believed to be racing against time to obtain documents ensuring the 200 million-euro payment so that this figure can be included in its balance sheet for 2019. Even if it fails to obtain these guarantees on time, PPC will financially benefit from the cash injection in its 2020 figures.

The utility must wait until next September before tariff revisions implemented four months ago make full impact for a vastly improved financial picture. These revisions are estimated to offer an additional 500 million euros.

PPC will also seek additional liquidity through a bond issue planned for the first quarter in 2020. According to a plan prepared by PPC’s previous administration, a loan amount of between 300 and 350 million euros is needed.

In addition, PPC expects to collect at least 300 million euros through the securitization of 1.5 billion euros of unpaid receivables, planned for the first quarter in 2020.

A PPC business plan, to be announced in about ten days, will offer a clearer picture on the utility’s challenging road to recovery. Details on cost cuts and a voluntary exit plan for staff members will feature in the business plan.    elec

 

No surprises expected in PPC’s 9-month results, out tomorrow

Power utility PPC, announcing its nine-month financial results tomorrow, already accounted for by the market, will be relying on a profitable first half in 2020, expected to be boosted by the full impact of additional revenue from tariff increases and other interventions.

Tomorrow’s results, according to forecasts, should present losses of less than 500 million euros, just a slight improvement compared to PPC’s performance for the nine-month period last year.

PPC posted a pre-tax loss of 318.4 million euros for the first half this year, or 159 million euros per quarter. The same trend, more or less, is expected in the third quarter as the power utility’s tariff increases did not take effect until September, the quarter’s final month.

This slightly improved performance is expected to carry on through the fourth quarter. The injection of a public service compensation (YKO) amount of approximately 200 million euros for previous years would come as a bonus and offer drastically improved results.

However, this prospect entirely depends on when the government will decide to execute the public service compensation payment to PPC, from this year’s budget surplus.

The corporation’s annual cash deficit of 900 million euros, announced in August, has yet to be covered. PPC’s administration is working to resolve the matter over a three-year plan.

PPC insisting on higher public service sum, disputes RAE

Power utility PPC has not abandoned an older effort for a public service compensation (YKO) payment concerning the year 2011 that is far greater than a 195 million-euro sum determined by RAE, the Regulatory Authority for Energy, and expected to be provided via the 2020 national budget or the 2019 budget surplus.

However, the power utility is once again disputing the authority’s calculations and insists the amount should be 680 million euros, or 485 million euros greater.

Besides the amount concerning 2011, PPC is also pursuing, through high-level legal action, a further 375 million euros for public service compensation sums accumulated beyond 2011.

Overall, PPC is seeking a total of 860 million euros in public service compensation.

Second electricity bill surcharge cut in two months imminent

Electricity consumers can expect a second cost reduction in two months, a public service compensation (YKO) surcharge cut for nighttime electricity consumption, once a wide-reaching energy ministry draft bill is ratified.

The bill will cover the electricity market’s further liberalization, power utility PPC’s modernization, gas utility DEPA’s privatization and RES sector support.

This latest electricity surcharge cost reduction follows a RES-supporting ETMEAR surcharge rate cut in September.

Public service compensation surcharge rates concerning nighttime electricity usage will be reduced for consumption levels exceeding 1,600 kWh. This cut promises to ease electricity-based heating costs for households this coming winter.

The energy ministry intends to decide on the extent of the surcharge reduction once the aforementioned draft bill has been ratified.

YKO surcharge costs concerning nighttime electricity consumption increased for households at the beginning of 2018 when a low flat-rate formula was replaced by one gradually increasing the surcharge rate in accordance with usage levels, as is the case for daytime consumption.

RAE, the Regulatory Authority for Energy, has proposed an YKO surcharge rate reduction from 0.085 euro to 0.03 euro per kWh for nighttime consumption of over 2,000 kWh and a cut from 0.05 euro to 0.015 euro per kWh for consumption levels between 1,600 and 2,000 kWh.

YKO rates for nighttime electricity consumption have been equated with daytime rates since January 1, 2018. These are 0.00690 euro per kWh for electricity consumption between 0 and 1,600 kWh, 0.05 euro for consumption between 1,601 and 2,000 kWh and 0.085 euro for consumption of 2,001 KWh and over.

Costly nighttime surcharge rates a winter threat once again

Extremely high public service compensation (YKO) surcharges concerning nighttime electricity consumption, an unpleasant surprise for many consumers last winter, once again threaten to burden the budgets of households preparing to use electric heaters this coming winter.

This surcharge cost rose sharply as of the beginning of 2018, when a fixed nighttime rate was replaced by incremental rates rising with higher consumption levels.

This change prompted sharp electricity cost increases for some 30,000 households relying on lower-cost night-zone electricity tariffs.

The problem was recognized by authorities and RAE, the Regulatory Authority for Energy, proposed nighttime surcharge reductions. A legislative revision was needed but the previous government’s energy ministry did not deliver a bill to Parliament. The current government, elected in July, has yet to make a move on the matter.

The RAE proposal called for a nighttime public service compensation reduction from 0.085 euro per KWh to 0.03 euro for the highest consumption category of 2,001 KWh and over, as well as a drop from 0.05 euro to 0.015 euro for the mid-level consumption category of 1,600 to 2,000 KWh.

Since January 1, 2018, nighttime public service compensation charges have been the same as the daytime rates for all consumption categories.

Prior to this, a flat YKO rate of 0.00889 euro for all nighttime consumption amounts applied until December, 2017.

PPC wants cost coverage for Crete energy sufficiency moves

Power utility PPC is unwilling to move ahead with measures required to ensure energy sufficiency on Crete between 2020 and 2023 – the period during which the island’s major-scale electricity grid interconnection with Athens is planned to be developed – unless it is assured cost coverage for these actions through public service compensation (YKO) surcharges included on electricity bills.

Various measures deemed necessary by a National Technical University of Athens (NTUA) study have yet to be implemented.

On the contrary, various issues keep surfacing. Just recently, PPC informed there is not enough time to convert a diesel-fueled unit at Atherinolakkos into a gas-fueled facility by next summer. All of the island’s high-polluting diesel-run units must be withdrawn by the end of this year.

PPC wants the cost of unit conversions, natural gas orders, as well as take-or-pay clauses that may be attached to gas supply agreements covered by the public service compensation surcharge.

Besides representing part of the overall solution for Crete’s energy sufficiency between 2020 and 2023, the plan to convert old lignite units to gas-fueled facilities also promises to serve as a long-term solution.

The NTUA study for Crete also proposes the installation of a new 100-MW unit, preferably gas fueled; development of new RES facilities with a total capacity of between 100 and 150 MW; and the installation and incorporation into the grid of energy storage systems (high-tech batteries) with a capacity of 30 to 40 MW.

Time insufficient for Crete diesel units switch to gas, will cost

Power utility PPC has admitted it does not have enough time to convert old, high-polluting diesel-fueled power stations operating on Crete into natural gas-fueled units by 2020, as it had previously assured, energypress sources have informed.

Though the island does not appear likely to experience an energy sufficiency problem, the cost of preventing a shortage will be considerable and will be covered by consumers around the country through elevated public service compensation (YKO) surcharges included on electricity bills.

Crete’s ageing diesel-fueled units, offering a total capacity of 100 MW, were given lifespan extensions in June through a legislative amendment delivered by the previous energy minister Giorgos Stathakis, without EU approval. EU fines cannot be ruled out.

This additional operating time is intended to provide cover until the launch of a small-scale grid interconnection to link Crete with the Peloponnese, expected at the end of 2020. A large-scale interconnection linking Crete with Athens is expected in 2023.

The conversion of the old power stations into gas-fueled units has constituted part of an overall plan to ensure energy sufficiency on Crete between 2020 and 2023.

Besides the high cost entailed in running these old power units, energy sufficiency on Crete is made even more expensive by high-priced leasing costs of power generators deployed on the island every summer to meet higher tourism-related electricity demand.

Plans for the installation of an FSRU off Crete appear to have also run into problems. Gas grid operator DESFA has proposed a bigger and permanent onshore LNG terminal installation.

 

PPC public service return for 2011 from 2020 national budget

The government has decided to cover a power utility PPC a public service compensation (YKO) payment of 195 million euros, endorsed by RAE, the Regulatory Authority for Energy, through the 2020 national budget, energypress sources have informed.

Though this solution, agreed to by energy minister Costis Hatzidakis and the finance ministry, does not promise instant relief for state-controlled PPC, burdened by poor finances, it does secure a prospective cash influx that will be taken into account by Ernst & Young, the utility’s certified auditor, scheduled to deliver a report on the Greek power utility on September 24.

This amount is expected to contribute to a sum of over 800 million euros needed by PPC over the next 12 months, according to new chief executive Giorgos Stassis.

RAE’s initial calculations for PPC’s 2011 public service compensation resulted in a sum of 160 million euros before this amount was revised to 195 million euros. PPC originally sought a sum of between 650 and 700 million euros before settling for RAE’s far lower figure.

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

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.

 

 

 

Authority wants grid links for all non-interconnected islands

Any Aegean islands currently not included in development programs for electricity grid interconnections with mainland Greece need to be added, RAE, the Regulatory Authority for Energy, has told power grid operator IPTO and distribution network operator DEDDIE.

RAE is striving for the completion of grid interconnections concerning the Dodecanese, west Cyclades and northeast Aegean islands by 2030.

The project’s completion will terminate the need for public service compensation (YKO) surcharges included on electricity bills to support high-cost, high-polluting diesel units operating on islands for local electricity generation. Annual costs add up to 800 million euros.

Also, the overall Aegean interconnection project will facilitate investments worth 3 billion euros. It will also encourage the development of renewable energy projects on islands with rich wind and solar energy potential.

The grid interconnection of the Dodecanese with the mainland, in Corinth, a major project at par with the prospective Crete-Athens link, will require investments worth 1.5 billion euros. IPTO estimates this project will be completed in 2027.

The northeast Aegean link, budgeted at approximately 500 million euros, will offer the islands of Lesvos, Chios, Limnos and Samos mainland interconnections with either Thrace, in the northeast, or further south, close to Athens.

IPTO estimates the west Cyclades interconnections, a fourth phase for the Cyclades region, will be completed in 2023, a year ahead of schedule. This project is planned to link Milos, Folegandros, Serifos, Sifnos and Kythnos with Lavrio, southeast of Athens.

 

 

Ministries in rush for €195m PPC public service payment

Energy and finance ministry officials, working against the clock, are scrambling to ensure a payment to power utility PPC for an outstanding public service compensation (YKO) concerning 2011 ahead of the next report on the utility’s results by certified auditor Ernst & Young, scheduled for September 24.

Meetings involving energy ministry, RAE (Regulatory Authority for Energy) and finance ministry officials have increased in frequency over the past few days as a solution is sought.

The officials are seeking to determine if the amount, calculated at 195 million euros by RAE, can be covered via the national budget without the need to impose YKO hikes on electricity consumers.

The amount is needed by PPC, struggling with poor finances, if further bad news from Ernst & Young is to be avoided in the next report.

The officials are also looking at whether PPC could receive this amount as one lump sum or through installments, until 2021, to avoid impacting the budget and consumers.

Initial calculations by RAE, the Regulatory Authority for Energy, had estimated a sum of between 160 and 200 million euros before the authority finalized the figure at 195 million euros.

A legislative revision giving RAE full authority over the matter is needed before PPC can receive the amount.

 

PPC’s new boss faces tough sprint until September 24

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.

 

 

Gov’t must decide if budget, consumers will cover PPC public service return

The newly elected conservative New Democracy government will need to decide whether a considerable public service compensation (YKO) return to the power utility PPC for 2011, believed to have been officially set at 195 million euros, will be covered by consumers, through electricity bill surcharges, or the national budget.

Though the PPC administration has questioned the amount set by RAE, the Regulatory Authority for Energy, believing it should be greater, it hopes the payment will be made soon, once Parliament resumes full operations, as the cash injection would offer some relief for the power utility’s struggling finances.

PPC previously demanded a sum of between 650 and 700 million euros for 2011.

A RAE letter forwarded to the energy ministry provided a public service compensation estimate of between 160 and 200 million euros for PPC, but, according to sources, the authority has already calculated a precise amount of 195 million euros, which it believes is fair.

A legislative revision is needed before the payment process can proceed as, based on existing law, the case for PPC’s public service compensation claim concerning 2011 is closed, RAE has informed the energy ministry in a letter.

The previous Syriza government did not submit the required amendment to Greek Parliament.

RAE report on PPC public service return for 2011 expected today

RAE, Regulatory Authority for Energy, is expected to report back to the energy ministry today, barring unexpected developments, on the sum the power utility PPC should receive in public service compensation (YKO) returns concerning 2011.

The amount is expected to range between 160 and 200 million euros, sources informed, which is considerably less than levels of 250 to 300 million euros rumored just weeks earlier.

The RAE report for the energy ministry is also expected to inform that a legislative revision will be needed for the payment to be made as current law considers the case closed for 2011 following a previous YKO refund to PPC.

Some sources have indicated that a new legal framework will be needed if RAE is to calculate the precise amount PPC stands to receive for 2011 public service compensation returns.

It remains unclear if PPC can use this anticipated report for an accounting entry of its 2011 public service returns before the end of June, which would improve the power utility’s first-half financial results, currently strained.

The trouble experienced by PPC in its effort to secure an YKO sum for 2011 has prompted the utility to announce it will also pursue a 375 million-euro public service amount concerning the period between 2012 and 2015, through legal action, if needed.

PPC to insist on public service return for 2012-2015

The power utility PPC, which has had trouble securing a public service compensation (YKO) return concerning 2011, estimated at between 150 and 200 million euros, will now also pursue a 375 million-euro YKO amount concerning the period between 2012 and 2015, through legal action, if needed, chief executive Manolis Panagiotakis has made clear.

This 375 million-euro figure is the difference between a 735 million-euro amount initially sought by PPC for the aforementioned four-year period and an eventual 360 million-euro payment endorsed by RAE, the Regulatory Authority for Energy, in 2017 and received by the power utility that year.

This amount was linked to the fiscal overperformance announced by Prime Minister Alexis Tsipras at the time.

Until recently, PPC’s administration appeared willing to abandon its pursuit of the remainder of the public service sum for 2012 to 2015 under the condition that a final decision would be reached for the YKO sum concerning 2011.

Though PPC’s effort to collect the public service compensation sum for 2011 has been delayed, the utility still hopes an amount can be made official before the end of June. This would enable a first-half accounting entry and offer relief to PPC’s financial results, currently under pressure.

PPC public service sum’s book entry to improve first-half results

RAE, the Regulatory Authority for Energy, is planning to soon calculate a precise public service compensation (YKO) amount that will need to be returned to the power utility PPC for 2011.

This calculation, for a sum expected to range between 150 and 200 million euros, will enable PPC to make an unpaid receivables entry into its balance sheet, which would improve its first-half financial results.

The finances of PPC, Greece’s biggest corporation, are believed to be under considerable strain at present.

The resulting sum will need to be paid either by PPC’s customers, through a public service surcharge hike, or via the national budget, when the country’s next administration takes over following the July 7 snap elections. The main opposition New Democracy part is well ahead in polls.

The energy ministry refused to attach a related amendment for PPC’s YKO return to a wider draft bill ratified in Greek Parliament just before it was officially dissolved earlier this month for the upcoming elections.

PPC has also pursued an amount of approximately 375 million euros in public service compensation returns from 2012 onward. However, the utility would be prepared to abandon legal action it has already taken under the condition that a decision is reached guaranteeing a return of the amount concerning 2011.

 

Public service compensation nighttime rate cut after the elections

A legislative revision for lower public service compensation (YKO) charges concerning nighttime electricity consumption has been left unfinished for after the snap elections on July 7.

The government’s call for early elections stopped the energy ministry from submitting a related bill to Parliament. This adds yet another pending matter to the next energy minister’s agenda.

After discovering, quite some time ago, that consumers were being overcharged for public service compensation amounts concerning nighttime consumption, RAE, the Regulatory Authority for Energy, ordered the energy ministry to prepare a legislative revision for correction. However, the call for early elections intervened, leaving the matter unfinished.

RAE proposed a nighttime public service compensation reduction from 0.085 euro per KWh to 0.03 euro for the highest consumption category of 2,001 KWh and over, as well as a drop from 0.05 euro to 0.015 euro for the mid-level consumption category of 1,600 to 2,000 KWh.

Since January 1, 2018, nighttime public service compensation charges have been the same as the daytime rates for all consumption categories.

Until December, 2017, a flat YKO rate of 0.00889 euro applied for all nighttime consumption amounts.

PPC, ND opposition party dread utility’s first-half results

Power utility PPC’s trajectory towards a poor first-half performance, expected as a result of disappointing first-quarter figures and looming very bad results for the second quarter, are a concern for both the company itself and the main opposition New Democracy party, if it is voted into power at the July 7 elections, as the recent European election results have indicated.

There are no signs of a late second-quarter rebound for PPC within the next fortnight or so, when the first-half period is completed.

Not surprisingly, the ND party has remained quiet on PPC, marginalizing the power utility on its pre-election agenda.

Cash flow problems are dreaded at PPC, a corporation with 16,747 staff members on the payroll, a senior company official recently acknowledged in comments to reporters.

PPC’s first-half results, to be published in autumn, as is customary, will provide a clear picture on the course of the company, which has relied heavily on cash injections from the State for support but has not received any new amount of late.

Most recently, PPC was expecting a cash injection of 250 million euros for public service compensation (YKO) concerning 2011. The prospect, which would have offered PPC some relief, was blocked by finance minister Euclid Tsakalotos.

 

 

PPC applying pressure for €250m public service return

Power utility PPC is applying pressure on all fronts to secure a public service return from 2011 following an energy ministry decision to not include a related amendment in a draft bill, causing confusion as to if and how the payment, estimated at 250 million euros, can proceed.

The energy ministry excluded a related amendment from a draft bill submitted to parliament late last week, ahead of Parliament’s unexpected early closure ahead of snap elections on July 7, spreading panic at the power utility.

PPC is now urging RAE, the Regulatory Authority for Energy, to bypass Parliament on the matter, stressing the authority is legally covered to proceed with the YKO payment without legislative backing.

RAE has recognized PPC’s right for an YKO return, but has slashed an initial power utility demand for an amount of between 650 to 700 million euros to about 250 million euros.

The prospective loss of this payment is a major cause for concern at PPC, whose cash flow and financial results will be negatively impacted. PPC is preparing its first half results, which must be published by law.

This development also promises to have a knock-on effect on the wider energy market. Other market players are waiting for PPC to make payments for various obligations so that, by extension, they may receive amounts owed by operators.

PPC to miss 2011 public service return despite RAE notification

The energy ministry is not, for the time being, examining the prospect of delivering a legislative amendment needed for a pending public service compensation (YKO) return to the power utility PPC concerning 2011, despite having been fully informed by RAE, the Regulatory Authority for Energy, well in advance on the need for the amendment.

In the past, energy minister Giorgos Stathakis had assured PPC would receive a proportion of the YKO amount it has demanded. PPC has sought 681.7 million euros but RAE, according to sources, has valued the return at approximately 250 million euros.

The amendment’s omission from a series of energy-sector revisions the ministry will seek to have ratified in parliament today, ahead of the snap elections on July 7, comes as a setback for PPC, both in terms of its cash flow and financial results.

PPC to miss €250m public service return, a new setback

The energy ministry, working overtime to prepare a series of legislative revisions it will seek to have ratified in parliament tomorrow, ahead of the July 7 snap elections, does not, at this stage, intend to include in its package an amendment that would enable the main power utility PPC to claim an older public service compensation (YKO) amount concerning 2011, sources have informed.

This development comes as a major concern for PPC both in terms of its cash flow and financial results.

The power utility had initially sought an amount of between 650 and 700 million euros but authorities have planned to return a sum of about 200 to 250 million euros, which would offer a major financial boost to PPC, facing various challenges.

Over the past few days, the state-controlled power utility’s administration has urged finance ministry and other government officials for a solution ahead of tomorrow’s parliamentary discussion of the energy ministry’s amendments.

As its next step, PPC will seek to convince RAE, the Regulatory Authority for Energy, the matter can skip parliament. PPC officials believe the authority is legally entitled to reach a decision on the matter without legislative backing.

RAE has already recognized PPC’s right to an amount stemming from YKO returns between 2008 and 2011, as the power utility was deprived of a year’s worth of money.