PPC requests 735 mln€ from state for supplying cheaper electricity to isles, low-income consumers

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Naftemporiki — The Public Power Corp. (PPC) on Tuesday requested higher rates to the tune of 735 million euros from the state for the cheaper electricity it supplied to islands off the national grid and to low-income consumers between 2012 and 2015.

The state-run and still majority-owned power utility rejected press reports claiming that the request for price hikes aims to cover PPC’s major operating losses and customer arrears, which total hundreds of millions of euros.

On its part, the utility’s management cites increased investment in infrastructure and operational costs in order to guarantee that electricity produced for islands off the national grid is available at the same rates as on the mainland.

The massive 735-million-euro figure over the 2012-2015 period, according to PPC, is the difference between what it has collected from island and subsidized customers as opposed to what is billed.

And yet, the PPC has not, after for many years of planning and many feasibility studies and negotiations, made any progress towards connecting the islands to the national grid  – the largest one being Crete –  something that could save the PPC customer  substantially more than  the €400 million per year used to subsidise diesel generation in Crete alone. Instead the PPC is happy to continue putting up electricity charges  while the government continues to use the electricity company to implement social policy.

The Head of the Hellenic wind energy association , Ioannis Tsipouridis said in 2015, that the then energy minister Panagiotis Lafazanis had declared the interconnection with Crete a “major target of the new government”. (as it was in many previous governments). However, no time-line for the project has come to light so far.

“If for example Crete is interconnected in order to exploit its enormous wind and sun potential, then the interconnection is self funded by the contractors more or less,” Tsipouridis said. “Over the last ten years there have been various studies carried out by Educational institutes, PPC, … but none has any sort of seal of approval”. 

The interconnection of Crete to the grid could facilitate the deployment of renewable energy projects in the island. Investors have already been expressing interest in developing renewable energy projects, but a lack of grid infrastructure means projects have not materialised.

In 2012 Greece received EU funds to study the electricity interconnection of the country with Cyprus and Israel, through Crete using submarine cables. The goal of that very ambitious €1.5 billion plan was designed to enhance the country’s energy security, increase the number of electricity markets in which it participates and eventually emerge as an energy hub for the southeastern Mediterranean. Linking Crete to the mainland could be seen as the first step towards realising that goal.

But as things stand, the consumers and tax payers are once again called to pay for the PPC’s chronic failure to invest and the state’s  lack of a welfare system that will take care of its most vulnerable groups – those who cannot pay for their electricity –  out of the ‘solidarity taxes’ already paid.