The country’s lenders have reacted against a proposal by RAE, the Regulatory Authority for Energy, for coverage of a Public Service Compensation (YKO) retroactive return to the main power utility PPC, totaling 360 million euros and concerning 2012 to 2016, through the national budget over a five-year period beginning next year.
The Greek finance ministry, facing a year of tough fiscal policies in 2018, has also not embraced the RAE proposal as it wants to avoid any new budget issues.
The government has adopted the RAE proposal, resorting to the national budget for financial support, as its implementation would prevent electricity bill hikes.
It is believed the government may revise the plan presented to the country’s lenders and exclude 2018 from PPC’s collection period, narrowing it down to four years, from 2019 to 2022.
PPC had initially demanded 735 million euros in retroactive YKO payments before RAE limited the figure to 360 million euros. The payment’s settlement is a bailout requirement.
An YKO surcharge is imposed on electricity bills to primarily subsidize high-cost electricity production on Greece’s non-interconnected islands and also support the Social Residential Tariff (KOT) program offering underpriviledged households subsidies for lower-cost electricity.