Armenia’s energy tariff hike justified, audit confirms

Armenia’s energy tariff hike justified, audit confirms

PanARMENIAN.Net - Deloitte and Touche CIS consulting firm completed the report of the 1st stage of advisory services at the Public Services Regulatory Commission (PSRC), RFE/RL Armenian Service reports.

“We analyzed the current situation in Armenia: the country’s sole energy supplier appeared on the brink of default, largely due to a gap between the system operator's forecasting and the load factor, a Deloitte and Touche statement reads. “Power generating companies had been affected by the financial deficit in the Electric Networks of Armenia, which in the short term would threaten the country's energy stability. Under such conditions, PSRC’s decision to increase tariffs, aimed at the stabilization of the situation and conservation of reliable power supply to consumers, is, from our perspective, justified.”

The electricity tariff hike came into effect in Armenia on August 1. Earlier, Electric Networks of Armenia (ENA) filed an application to Public Services Regulatory Commission of Armenia (PSRC) regarding an increase in electricity tariffs, a hike that the parliamentary opposition and civil society considered as unfounded and serving the interests of ENA. Until August 1, 2015 the daytime and night tariffs for population stood at AMD 41.85 and 31.85 per KWh, respectively. The ENA proposed raising the tariffs to AMD 58 and 48 respectively. However, the Commission only partially granted the ENA application on a rise in tariffs. The power tariffs in Armenia have increased by AMD 6.93 instead of 17.

Prime Minister Hovik Abrahamyan declared that an audit of the Electric Networks of Armenia (ENA) was to start in late August. The PM said the government will express its position after Deloitte & Touche CIS presents its findings. The company will provide consulting services to Armenia’s Public Services Regulatory Commission (PSRC) concerning the regulation of tariffs in energy sector.

#ElectricYerevan

Electric Networks of Armenia (ENA) submitted a bid to the Public Services Regulatory Commission (PSRC) demanding to raise energy price by AMD 17 ($0.036). During the June 17 session, PSRC partially satisfied the bid raising the tariffs to AMD 6,93 ($0.0146) from August 1, causing major public outrage.

On June 19, members of the initiative “No to Plunder” started a sit-in protest at Freedom Square. On June 22, demonstrators headed towards the presidential headquarters on Baghramyan Avenue. The police, however, blocked the part of the street on the way to the President’s residence. The rally participants decided to continue the protest right in front of the police cordons. After a 10-hour sit-in, the police called on the demonstrators to leave the area, using water cannons to disperse the protesters.

Not only protesters but also journalists and operators covering the rally were subjected to the police violence: 237 people were detained and released later. The attitude of the police enraged the public: thousands gathered at Baghramyan Avenue demanding to cancel the Commission’s decision on energy price hike. Countless demonstrators spent several nights at the campaign venue.

Armenian President Serzh Sargsyan issued a statement on June 27 informing that an audit will be conducted at ENA, with the government to cover the costs of the tariff hike. He called on the protesters to clear the Avenue, but the demonstrators stayed put. After a discussion with picketers, “No to Plunder” coordinating group members decided to continue the protest at Freedom Square. Many demonstrators, however, disagreed. Thus, some of the protesters moved to Freedom Square, while the majority remained on Baghramyan Avenue, determined to go on until the Commission’s decision is cancelled, rather than suspended.

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