The new leadership of Greece’s Public Power Company (PPC/DEH) has revealed a rescue plant worth 500 million euros in order to rescue the loss-making electricity utility. The plan includes rate hikes and cuts in the bonus discounts. Guess who will rescue the PPC. The Greek people, of course.
The proposal by the new PPC leadership to rescue the PPC includes a direct increase of the price per kilowatt and cuts in bonus reductions.
Specifically the package measures include:
Price increase per Kilowat to increase by 16.4% – 19,4%: Consumption of less than 2,000 kilowatts per four months, from €0,0946 per kilowatt currently, to €0.11058. For consumption exceeding 2,000 over a four-month period, the rate will go to €0.11936, from €0.10252 today.
Night tariffs will increase from € 0,0661 to € 0,07897 per KWh.
Decrease from 10% to 5% to the discount for PPC subscribers paying their bill on time. The original 15% discount was reduced to 10% in April 2019.
Introduction of green emissions penalty CO2 for households.
50% discount for those on mechanical support also eligible for the Social PPC tariffs.
The new measures are to go into effect as of 1. September 2019. The company’s board is to officially announce the plan tomorrow, Friday, August 30.
The utility leadership claims that consumers’ bills will not be burdened by the hikes and cuts as they will be off-set by the reduction of Value Added Tax and the “Green” surcharges.
The VAT for PPC bills was reduced from 13% to 6% under the SYRIZA government as of late spring this year. The so-called Green surcharges, the Special Fee for Greenhouse Gas Emission Reduction will be decreased by 25%, from €22.67 per MWh to €17.
According to PPC, the hikes are necessary in order to avoid serious risks, even the survival of the public company,
PPC sources told media that the company’s auditors Ernst & Young have warned on the PPC viability, that would lead to dramatic developments that may even include pay stoppages (for salaries, suppliers, etc.). , suspension of trading of the shares, classification of PPC loans as non-performing, etc., with obviously serious implications for the economy as a whole.
Main opposition party SYRIZA has already calculated that PPC bills will show an increase of 13% for 2MWh in four months.
The only good thing of the PPC package is that the 75% reduction for the company workers will be reduced to 30%. For decades workers at the PPC enjoyed generous reductions that went beyond their electricity consumption and included also the fees to municipality, the fee for the state broadcaster ERT.
Last week, the PPC has issued strict orders to the Hellenic Electricity Distribution Network Operator (DEDDIE) to step up action to cut power to customers that systematically avoid paying their electricity bills and rack up huge debts.
According to state-run news agency amna, there 582,000 cases of debtors with unpaid bills that are over six months in arrears, with total debts amounting to 545 million euros. At the same time, there are also 895,000 cases where final bills have been issued, amounting to arrears of one billion euros. In the last two months, 30,000 requests to cut power to this category have been sent to DEDDIE.
It is not clear though whether the power will be also cut to political parties and public administration departments for their unpaid bills. Probably not.
PS We will see in which direction the power-money rabbit runs by the next PPC bill…