The gap separating the country’s creditor representatives and the energy ministry on energy-sector reforms needed as part of the overall effort to conclude the bailout’s second review remains wide and, at this stage, seemingly unbridgeable.
Two meetings held last week between energy minister Giorgos Stathakis and the creditor representatives and three more sessions involving main power utility PPC officials, including the CEO Manolis Panagiotakis, with a technical team representing the lenders, failed to produce any results on issues concerning the electricity amounts to be offered by the utility to independent traders through NOME auctions and, especially, the establishment of alternative structural measures should the auction process fail to deliver.
A PPC proposal entailing the creation and sale of new utility supply subsidiaries, through the transfer of existing clients to these new firms, an approach preferred by the utility to lower its dominant market share, was presented in detail last week. The response by lenders, who seem hesitant at best, remains to be seen.
The lenders are pushing for PPC to increase its electricity amounts offered through the NOME auctions, introduced last October as a means of providing other traders with access to the utility’s low-cost carbon-fired and hydropower stations. The objective is to gradually decrease PPC’s market share to less than 50 percent by 2020.
At this stage, it appears that the lenders will insist on PPC increasing its electricity amounts for the NOME auctions.
The lenders want to conduct a review of the NOME plan’s progress in June and then implement alternative measures should the auction plan be deemed ineffective in PPC’s market share contraction plan. The utility, whose market share remains dominant at just under 90 percent, missed its end-of-2016 target.
Lenders have proposed the sale of a 40 percent portion of PPC’s carbon-fired and hydropower stations as a NOME alternative.
During last week’s meetings, PPC officials contended that the utility’s counterproposal concerning the establishment and sale of new electricity supply subsidiaries could be actualized by June.