The European Commission has concluded that lower electricity tariffs granted in 2007-2008 by the Greek state-owned Public Power Corporation (PPC) to Aluminium of Greece conferred an undue advantage to the company, in breach of EU state aid rules. As result, Greece must recover the aid from the beneficiary.
The Commission also investigated the financing of a gas pipeline by the state-owned Public Gas Corporation, connecting Aluminium of Greece to the national gas grid, but concluded that it was carried out on market terms and did therefore not involve state aid.
The decision follows an in-depth investigation opened in January 2010. Aluminium of Greece benefited from a difference between its preferential tariffs and the standard rates for large industrial consumers during the period concerned, which totals €17.4 million.
The preferential tariffs go back to 1960 and were supposed to expire in March 2006. But they resumed in January 2007 until March 2008, at which point PPC won an appeal to have them terminated.
The price difference gave Aluminium of Greece an undue advantage over its competitors, who had to pay the normal tariffs, and consequently resulted in a distortion of competition. Greece must recover the €17.4 million plus interest.
In parallel the Commission has concluded that the partial financing by PPC of the construction costs of a pipeline to connect Aluminium of Greece's co-generation power plant with the national gas transmission grid did not involve state aid. This is because the financing generated a sufficient return. Under EU state aid rules, interventions by public authorities in companies carrying out economic activities are free of state aid if they are made on terms that a private agent operating under market conditions would have accepted (the market economy investor principle).