Govt concerned hikes in power bills will slash utility's revenues

By G. Kanoupakis

The leftist government appears ready to offer what it calls “political backing” to the state-run Public Power Corp., which holds the dominant position in the domestic energy market, so the latter can avoid whatever repercussions from a proposed hike in a renewable energy sources fee already tacked on to monthly power bills.

The proposed increase in the RES fee comes after the government tabled a relevant draft bill in Parliament that includes the hike.

Increased power bills for households, businesses and industry would is expected to add to public discontent from this year’s higher income tax rates, hikes in indirect taxes, pension cuts and the continuation of a property tax (ENFIA) that the ruling party, SYRIZA, promised to abolish when it was in the main opposition.

According to a press release on Monday by the environment and energy ministry, which oversees the Athens bourse-listed PPC, a cash flow problem faced by the state-run utility is not “insurmountable” – without, however, citing any concrete proposal or recommendation on to deal with the issue.

PPC, also known as “DEI” in its Greek-language acronym, already faces a growing mountain of arrears worth three billion euros.

The still state-dominated power sector requires delicate handling by the coalition Tsipras government, given that a memorandum-mandated provision calls for a liberalization of sector, especially ahead of a second evaluation of the Greek program (third bailout) in the autumn. A stake of 17 percent in the state-run grid transmission network (ADMHE) is also eyed as a looming privatization, although internal government opposition has arisen over the prospect.

Conversely, the leftist government wants to keep power bills down for households, in a bid to buttress its standing as a "protector" of the more economically distressed classes of society.

Ministry officials calculate, according to reports, that a hike in power rates will slash revenues.