BRUSSELS, Jan 27 (Reuters) - Europe's competition watchdog is investigating whether Greece's state-owned power utility illegally subsidised smelter Aluminium of Greece by selling it electricity below market prices.
The European Commission said on Wednesday that Public Power Corp (PPC) might have undercharged by 17.4 million euros ($24.5 million) and it would investigate the case under European Union state aid rules.
The Commission said in a statement that it would also investigate allegations that state-owned Public Gas Corp paid the construction costs of a gas pipeline belonging to Aluminium of Greece, southeast Europe's biggest aluminium smelter.
It did not identify the complainants.
"We have to make sure that Aluminium of Greece did not receive an unfair economic advantage over its competitors but paid, as everybody else, the market price for the electricity and gas it bought," Competition Commissioner Neelie Kroes said.
The Commission has already investigated a number of complaints that the aluminium company received privileges before Greece joined the EU in 1981. It has taken a preliminary view that due to the timing, those privileges need not be repaid.
Aluminium of Greece is a unit of the Mytilineos Group , which aims to become PPC's biggest rival in the Greek electricity market.
PPC said last July it would seek arbitration to resolve a dispute with Aluminium of Greece, which has refused to accept a 10 percent increase in PPC's electricity prices, citing profitability concerns amid a slumping metals market.
(Reporting by Pete Harrison, editing by Dale Hudson)
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