Electric Networks of Armenia incurred 11 billion drams losses last year

YEREVAN, February 25. / ARKA /. Armenia's  Russian-owned national power utility -Electric Networks of Armenia (ENA)- incurred last year 10.7 billion drams worth losses, up from 9.9 billion drams it had incurred in 2013, ENA's CEO, Yevgeny Bibin, said at today's session of the Public Services Regulatory Commission (PSRC).

He said the company has been incurring losses over the past three years. He said also the company is experiencing serious financial difficulties and has 13 billion drams of arrears to electricity producing companies.

Today PSRC decided to postpone consideration of the company's investment program for 2015 worth 8.4 billion drams until April 1 acting on a company's request.

In the request the company refers to an agreement that is to be signed during Armenian President Serzh Sargsyan's planned meeting with the head of Russian INTER RAO (the owner of ENA) Boris Kovalchuk. According to Bibin, the agreement will serve as a basis for the company's strategy allowing it to build clear-cut relationships with banks and seek restructuring of loans and attracting new ones at favorable terms.

According to the ministry of energy and natural resources, the Electric Networks of Armenia has $220 million in outstanding debts to local banks. The Russian-owned company blames the current situation on higher than planned losses (by 2 percent) that translate into 5 billion drams annually. Besides, it has to buy more expensive electricity from thermal power plants because hydropower plants do not operate at their full capacity.

Citing this ministry of energy and natural resources argues that the current tariffs do not reflect the real costs of power generating companies. It says it has developed a methodology for reduction of losses and improving the efficiency of the system, which will allow to reduce losses by 2% in the next two years.

In 2013 PSRC allowed the company to raise the energy price by 27 percent, 'because of the increased cost of Russian natural gas', which is used to generates more than one-third of Armenia’s electricity. The price went up by another 10 percent in July 2014, 'to help the company to end mounting financial losses,' according to PSRC . ($ 1 - 478.63 drams). -0--