RAE chief sees power tariff hike
The Greek Regulatory Authority for Energy (RAE) said yesterday it will allow Public Power Corporation (PPC) to increase its tariffs by about 2 percent via a fuel surcharge to offset higher oil costs. Michael Caramanis, head of RAE, told Reuters PPC was expected to request a fuel surcharge to compensate for its higher oil bill. «RAE will approve (a fuel surcharge). PPC has not formally made a proposal but we will see one soon,» he said. PPC’s increasing reliance on oil and natural gas to fire its generators has left it vulnerable to changes in global fuel prices, Caramanis said. «It is very reasonable for these costs to be recognized, to be reflected in retail prices in a manner that will not be permanent,» he said. «Tariffs may go up by about 2 percent due to the fuel surcharge.» PPC, the country’s dominant electricity utility which is 51 percent state-owned, posted a bigger-than-expected 54 percent drop in net profit to 135.7 million euros ($168.6 million) last year, hit by surging global oil prices. Caramanis said it was likely the development ministry, which has the final say on a fuel surcharge, would approve its recommendation. «The ministry seems to be discussing it. It has a reasonable chance (of being approved),» he said, adding the regulator would process the request within a month of it receiving the official green light. The government granted it an average 3.4 percent increase last September, broadly in line with last year’s inflation rate. Caramanis said he saw Greek electricity rates, seen among the lowest in Europe, going up by 20 to 30 percent within the next five to six years or so. On PPC’s carbon emission costs, Caramanis said the regulator would not allow the burden to weigh on consumers. «I think PPC has expressed interest in passing through (the costs). That will never be approved by RAE. PPC must have an incentive to decrease its carbon emissions.» Foreign investors Caramanis said Greece expects at least two foreign investors to take part in a tender for a 400 megawatt power plant, the first project in a wider energy expansion scheme. The government, which plans to tender for three units with total capacity of 1,200 MW over the next two years, forecast on Thursday that it would attract 750 million euros ($941 million) in investments for all three projects. «(Spain’s) Iberdrola is interested in participating, Edison is interested in participating and possibly others,» Caramanis said. «They are talking with the five, six local companies with (power plant) production and installation licenses. I hope we will see them bid,» he said. The first 400 MW power plant should start commercial operation by the summer of 2009, Caramanis said. The initial two tenders require both plants to be fired by natural gas and to be located in the more populous south for easier transmission of electricity to areas of principal demand. The regulator said he might relax tight guidelines for the third station. «The third tender could be modified and be less limited geographical and technology wise. The plant could be lignite- or coal-fired,» said Caramanis. (Reuters)
