The electricity tariff shouldn't exceed 12 tetris
31 July, 2015
The electricity tariff shouldn't exceed 12 tetris
After the regions, the increase of the electricity tariff threatens the population of Tbilisi as well

Populations of the regions, except for Kakheti, will pay the raised price for electricity from the 1st of August. GNERC (Georgian National Energy Resources Commission) has partially satisfied Energo Pro Georgia’s demand increasing the tariff on 1 kw/h electricity by 3.348 tetris, instead of 4.8 (with VAT included it makes 3.95 tetris). After the regions, the increase
of the electricity tariff threatens the population of Tbilisi as well because Telasi has also addressed GNERC to review the tariff. The company has yet to specify the amount of the hike yet but according to different evaluations, a six tetri raise is expected.

“The tariff should be raised, we have no other way out.”

There is a differentiated tariff for electricity consumption in the country. The populations of the regions that consume less than 101kw/h pay a 9.0034-tetri tariff; and after the increased tariff they will have to pay about 12.954 tetris. Those who consume 101-301 kw/h a month will have to pay 16.93 tetris instead of 12.98. And those who consume more than 301 kw, paying 17.50 tetris per 1 kw, will have to pay 21.45 from the 1st of August.
In order not to make the raised tariff a heavy burden for the socially unprotected population, the government made a decision to fully cover the difference between the old and the new tariffs from the budget. This will apply to 208,000 socially unprotected families. About 2 million GEL will be allocated from the budget for their backing. But the government is’ forgetting’ that the tariff increases for the commercial consumer as well and this will be reflected on every product or service price in pricing of which electricity is involved.

Who or what is Energo Pro Georgia?

Officially, Energo Pro Georgia is a sister Company of the Czech Energo Pro AS. Like Telasi, Energo Pro Georgia owns distribution companies, one thermal power plant and 14 hydropower plants.

Gia Arabidze, the Dean of Faculty of Energy and Telecommunications of the Georgian Technical University said, “Since the change of GEL exchange rate, has the price decreased on any product in Georgia? Electricity is a product too and its price had to rise as well. Earlier, when there was talking about the tariff decrease I considered that an immediate tariff change – increasing or decreasing it – was not allowed; this issue is to be decided by professionals. As a power engineering specialist I proved this earlier and say it again that the tariff should be raised, we have no other way out. As for the quantity – it’s an issue of concrete calculation. Believe me, if we don’t help the energy now in winter we may face big problems.

“For years Energo Pro Georgia has been making a big profit, which I can say straightforwardly is an illegal profit.”

– Was it possible to avoid the tariff rise?

– If the GEL-Dollar exchange rate didn’t rise so drastically, if it was maintained within the limits of 1.85, it might be possible to keep the old prices. A 2.25 rate increase is already problematic.
Currently, our power engineering rests on the so called cheap current produced by the Enguri HPP. The more we delay the construction of not only Khudoni but Namakhvani, Nenskra and other HPPs the more problematic the coming years will be.

Temur Chichinadze, member of Academy of Power Engineering of Georgian said, “The GEL exchange rate has certainly fallen, but for years Energo Pro Georgia has been making a big profit and I can say straightforward that it is an illegal profit because from the very beginning Noghaideli, the former Finance Minister set exaggerated tariff. GNERC didn’t envisage many circumstances taking into account only recent period when the GEL exchange rate decreased. Due to this, the financial balance of the company may be disrupted but the party that possesses generation and distribution is the monopolist. On the whole it’s a profitable company. Besides, GNERC has 150 days – a 5-month term for reviewing the tariff application. In this case, the term expires in September. Discussion of this issue was very hasty. Now in GNERC there are three members who control the situation but there should be five. Now a vacancy is announced on these two members and competition is to be held. There is a reasonable assumption that they were afraid – in case the new members were added they wouldn’t manage so easily to initiate this issue.”
“Telasi also has an artificially inflated tariff. Personally I think that the tariff shouldn’t exceed 12 tetris.”

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