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PPC Gives Good Customers Installments

PPCWith unpaid bills piling up at more than $1 million a day, Greece’s Public Power Corporation (PPC) said it will give customers who had been paying on time but fallen behind a new installment plan with up to 40 months to catch up on back payments that have passed 1.3 billion euros ($1.69 billion).
Many Greeks buried under pay cuts, tax hikes and slashed pensions can’t afford a doubled property tax being put into electric bills under the threat of having power turned off.
PPC is turning off the electricity to 30,000 customers are month but that scheme has backfired because it’s cut off cash flow to the company. Power hasn’t been turned off in some cases to major debtors or to government municipalities who don’t pay.
The new plan doubles the number of interest-free installments offered for households and medium- and low-voltage corporate consumers. PPC officials said they hope that will help scores of thousands of households andd businesses that are having problems paying their bills and reduce the mountain of unpaid bills with many people giving up hope of paying.
The first-quarter figures are particularly disappointing regarding the power company’s cash inflows. PPC is worried the situation will deteriorate further due to the prolonged recession and the continued payment of the special property tax via power bills for 2013 too. In the January-March period unpaid bills stacked to 27 million euros ($35.2 million) per month, against a forecast for 15 million in the corporation’s budget. Daily revenues last month were down 5 percent, which translates into some 30 million euros per month.
April so far appears to be showing some improvement, according to a PPC official, although there seems to be a decline in collections of the special property tax that up to last month were steady at around 10 million euros ($13.05 million) per day, roughly at last year’s levels. PPC said more people are paying only the electric bill and not the property tax surcharge.
The new payment program for unpaid bills has been approved by the PPC board, although its implementation could be difficult because of the current bill restructuring by 1 million consumers that have created long queues outside electric company offices. PPC workers said they can’t handle more people.
That led PPC to say it will arrange payment plans by phone and it has already launched a tender to hire a company to undertake this project. Once the plan is approved though, customers will have to go to a PPC office in person to pay, a common practice in Greece instead of making electronic payments via the Internet.
The new program will split debtors (either those on so-called Social Household Rates or those proven by their local municipality to be poor) into categories, depending on their consistency in paying bills and whether they have tampered with their electricity meters. Customers who have previously always paid on time or have only failed to on one occasion will get up to 40 monthly installments to pay their dues.
Those who have repeatedly failed to stick to payment arrangements will have to pay 10 percent of their debts up front and the rest in six interest-free installments. Customers who have tampered once with their meter after being cut off must pay a deposit of 20 percent and the rest in four monthly installments, while those who have repeatedly violated meters after being disconnected will pay the whole amount in a lump sum or offer a guarantee in return for a payment plan.
For those consumers who are not deemed debt-prone, the number of installments will double, while for companies, the increase in the number of tranches ranges between 50 and 60 percent.

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