PPC says spin-offs necessary for future
Greece’s largest electricity utility, Public Power Corporation (PPC), needs to split its operations into separate production and distribution units soon in an effort to return to profitability. «The restructuring of PPC is fundamental to boosting efficiency and competitiveness and is absolutely necessary to secure PPC’s viability,» the company said in a statement. «The legal separation of transport and distribution activities with the creation of subsidiaries… is a strategic choice of top priority.» PPC’s profits have been hurt by rising energy costs and state-regulated tariffs that limit its ability to raise charges to offset those costs. Last month, the utility reported a bigger-than-expected second-quarter loss of 112 million euros. PPC, which generates about 90 percent of Greece’s power needs, wants to split into separate units for production, trading, distribution, lignite mining and renewable energy development to boost efficiency and meet European Union competition rules. But strong opposition and a series of strikes by its powerful unions last year forced it to shelve its restructuring plans, which the unions said was an attempt to privatize the company. Greece liberalized its energy market last year, while the company, 51 percent-owned by the state, has continually sought permission to raise tariffs to offset soaring oil costs. (Reuters, Kathimerini)
