ATHENS (Dow Jones)--The Greek government has decided not to compensate electric utility Public Power Corporation SA (PPC.AT) for state-mandated social subsidies it provides, after a recent decision to hike electricity tariffs, financial daily Imerisia reports Wednesday.
Citing unnamed sources, the newspaper reports that Finance Minister George Alogoskoufis has decided that the recent tariff hikes more than cover the so-called public service obligations owed to the company by the government.
The government, which owns 51% of PPC, requires the company to subsidize certain social groups, with cut-rate tariffs to farmers, large families and island inhabitants among others. Those public service obligations will cost the company about EUR437 million this year.
Nov. 30, the government decided to raise electricity tariffs by up to 10% with immediate effect, with further increases planned for next year for certain users.