New Findings on the Possible Electricity Price Hike
10.06.2015
11:00
The planned electricity price hike and the current tariff of 41 drams are not justified since the Public Services Regulatory Commission has inflated the expenses of the Electric Networks of Armenia which are included in the tariff.

Artak Manukyan, economist, Procurement Expert at the Transparency International Anticorruption Center, shared insights and findings on the expenses incurred at ENA and PSRC's approval of the proposed costs which directly impact the electricity tariff.

“There is a price margin, i.e. the set of allowable expenses, and we pay for the costs included in it and it directly affects the price. Is the current 41 drams justified or not? I will share my study and findings. I would note that the current electricity tariff of 41 and the former 37 drams were inflated,” Manukyan said.

Manukyan went on to present the expenses covering all directions for the fiscal years of 2013, 2014 and 2015 ENA have had.

Reconstruction

2013 - 1 billion 613 million drams

2014 - 1 billion 636 million drams

2013 - 1 billion 593 million drams

“In this line the 2015 input index should have been higher as compared with 2013 due to the inflation which affects the material costs. Evidently, they did not have any determining tool. Instead, they chose face-to-face negotiations to reach the common denominator between the sides. Lately there has been much talk about the dram-dollar fluctuations or water scarcity, but they have nothing to do with this approach,” Manukyan said.

Repair Services

Repair services (electricity meters) - 2013 - 163 million drams

Calibration services (electricity meters) - 2013 - 150 million drams

“In 2014 the ENA fixes 96 million drams for the repair of electricity meters whereas the PSRC suggests allocating 163 million drams for it. The same concerns checking meters: 150 million drams instead of 89 million. So, the ENA has inflated costs at the expense of common consumers. Here there is a tremendous imbalance in terms of expenses over these years,” Manukyan said.

Other Expenses (Consulting)

2013 - 3 billon 682 million drams

2014 – ENA proposed to allocate 4 billion 22 million drams; PSRC approved 3 billion 652 million drams

2015 – ENA – 309 million drams; PSRC – 39 million drams

“If 39 million drams was quite enough, why have we had to bear the burden of 150 million for so many years? There are base costs impacting the price. There are some calculations regarding the reduction of power losses, which are included in the allowable expenses. Moreover, losses do not reduce and it is not clear why they should need these calculations. In 2013 the amount of allowable expenses was 192 million. In 2014 ENA suggested 163 million drams while the Public Services Regulatory Commission, at our expense, was very kind and added another 50 million drams to have a final sum of 213 million. In 2015, ENA intended to allocate 280 million drams but the Public Services Regulatory Commission replied that it could approve only 32 million drams. Why hasn't the commission done the same so many years?" Manukyan said.

Marketing

2013 – 76 million drams

2014 - ENA proposed to allocate 59 million drams; PSRC approved 75 million drams

2015 - ENA proposed to allocate 56 million drams; PSRC approved 33 million drams

Legal Consulting

2013 – 84 million drams

2014 - ENA proposed to allocate 161 million drams; PSRC approved 84 million drams

2015 – PSRC refused to allocate any sum to legal consulting

Business Trips

2013 – 163 million drams

2014 - ENA proposed to allocate 166 million drams; PSRC approved 161 million drams

2015 - ENA proposed to allocate 165 million drams; PSRC approved 94 million drams

Salaries

2012 – 15 billion drams

2013 - ENA proposed to allocate 19 billion drams; PSRC approved 18 billion drams

In 2013, ENA fixed an average salary of 177 thousand drams while PSRC raised it to 200 thousand drams.

"So, PSRC Head Robert Nazaryan seems to be worrying about the staff at ENA more than the company director. The accusatory finger should be pointed at the commission because they keep saying they have never approved any luxury or unnecessary costs. Yet, we have been bearing the burden of these costs for years," Manukyan said.

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