Greek state-owned utility PPC increased
provisions for bad debts by 164pc on the year in the first half because of the
financial crisis and liquidity problems in the power market.
Liquidity problems
in the power market, in part stemmingfrom debts to the system operator
Lagieaccumulated by privately-owned energy suppliers Energa and Hellas
Power before they were removed from the market, dented PPC's results. The
utility also had to increase provisions for bad debts for household and
industrial users. Unpaid power bills rose after the government beganlevying
a property tax through electricity bills.
PPC made a provision of €28.1mnm ($35.1mn) for
Lagie's debts, a €43.7mn provision for low and medium-voltage customer debts
and €39.8mn for debt run up the state-owned nickel firm Larco. Total provisions
for bad debts were €142.4mn in the first half. PPC's first-half profit fell by
89pc on the year to €13.9mn on sales of €2.8bn.
The total cost of paying for the “cost-plus”
mechanism, under which independent power producers (IPPs) receive a guaranteed
power price for running their gas-fired units at minimum capacity, rose to
€84.6mn in the second quarter from €40.1mn in the first quarter. Commercial
operations at privately-owned Mytilineos' 436MW Korinthos power plant began in
April, increasing the amount of capacity eligible for the cost-plus mechanism. The
total amount spent on compensation for IPPs in the first half of the year was
209pc higher than a year earlier.
PPC's purchases of power from the mandatory
power purchasing pool and imports rose by 31.6pc as the utility took a greater
share of the retail supply market after a number of private-sector suppliers
ceased operations.
Hydropower generation rose by 10.5pc on the
year in second quarter after it was curtailed in the first quarter “in order to
secure adequate hydro reserves for the summer period”.
The 157MW Illarionas hydropower plant will
gradually be put into operation and reach capacity by the end of this year. Test
operations at the 417MW gas-fired Aliveri 5 power plant began this month and
the unit is expected to enter commercial service later this year.