Armenia’s PSRC will not allow electricity price rise in 2015

Armenia’s PSRC will not allow electricity price rise in 2015

YEREVAN, June 17. /ARKA /. Armenia’s Public Services Regulatory Commission (PSRC) will not allow electricity producing and distributing companies to increase the price of electricity for households and other consumers in 2015. 

Earlier this month PSRC said it would raise the price by more than 10 percent one year after sanctioning an even sharper increase in the key energy tariff. 

The electricity price rose by almost 27 percent in 2013 July following a surge in the cost of the Russian natural gas supplied to Armenia. Gas is used for generating around one-third of Armenia’s electricity. The Russian gas price has not changed since then and is not expected to rise in the next few years.

Speaking at a parliamentary hearing on electricity tariffs today PSRC chairman Robert Nazaryan did not rule out the possibility that in 2015 electricity tariff  may decline. 

According to Nazaryan, the planned rise of the tariff from August 1 is to help the Russian-owned Electric Networks of Armenia (ENA) to recover its financial losses in the amount of 16.3 billion drams resulting from the delayed launch of the Armenian nuclear power plant following a regular major repair.

Nazaryan recalled that the ENA was privatized in 2002 for $40 million and no investment was made into it until 2007. In 2007 there was a change of ownership. The new owner, according to him, has invested 80 billion drams in upgrading the facility, and has been working since then with zero profitability.

Naira Zohrabyan, an MP from the Prosperous Armenia Party, said the problem is the direct outcome of a poor management. 

"It is unacceptable that Armenian citizens pay for the bad management. Each competent manager must calculate the risks," she added. 

According to preliminary estimates of the PSRC, the electricity system needs additionally 20 billion drams to ensure financial stability, reliable and secure supply of energy to all consumers. This in mind the PSRC wants to allow power plants and distributing companies to increase the current rates for all consumer groups by 3.8-4.3 drams for 1 kW / h (including VAT).

Nazaryan said the regulator will make a final decision in the foreseeable future. The Electric Networks of Armenia is a 100% subsidiary of Russian Inter RAO UES. The company has about one million subscribers. ($ 1 - 411.86 drams). -0 -

15:46 17.06.2014

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