ATHENS (Reuters) - Greece's energy regulator on Thursday published proposals to overhaul the country's electricity system, in a bid to boost competition and break the near-monopoly of state-controlled utility PPC.
Electricity wholesale prices should gradually increase from January 2011 to reflect power stations' carbon emission costs, the Regulatory Authority for Energy (RAE) said in a document published on its web site.
Any such move, if adopted, would narrow the profit margins of PPC, which produces more than half its total energy by burning lignite, a polluting form of soft coal which generates high carbon emissions.
"We need to reconsider basic regulatory rules in the wholesale market to improve its efficiency and create conditions for healthy competition," the regulator said.
RAE's non-binding proposals come amid a row between Greek and European Union officials on how the indebted country should liberalize its electricity market to comply with the terms of a 110-billion euro ($144 billion) EU/IMF bailout.
An EU official told Reuters on Tuesday Greece needed to take far more drastic measures, such as selling to investors 40 percent of PPC's lignite and hydro capacity.
Greece's socialist government has so far refused to consider such a move for fear of upsetting the company's powerful labor unions. Greek officials have instead suggested that reform of the wholesale electricity market would suffice to boost competition in the sector.
PPC currently controls 97 percent of the retail and 93 percent of the wholesale market for electricity in Greece. The prices the company charges customers will be regulated by the government as long as it controls more than 70 percent of the market.
(Reporting by Harry Papachristou; Editing by David Holmes)
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