How much will the Electricity Price Reduce and What Effect will it Have on the Economy?
06.05.2016
12:00
“If we did not do anything, the electricity price would reduce by at least 6 AMD on August 1,” Economist Artak Manukyan said during the discussion at Media Center, reasoning his opinion by the fact that by August 1, 2016 the Electric Networks of Armenia (ENA) will have covered its debt of 24 billion AMD because of which electricity price increased last year.

The economist spoke about some other factors as a result of which the electricity price can reduce by 10 AMD. “Let’s go back to the factors that Public Services Regulatory Commission (PSRC) mentioned when raising the price. 1. AMD/USD influence. There is no such an influence now as AMD is the most stable currency. 2. Lack of water.  This factor is not relevant as the year is watery as a result of which the electricity production of HPP has increased by 28% this year. 3. Nuclear Power outage. This is also irrelevant.  Armenian Nuclear Power Plant (ANPP) has produced more electricity compared to last year, there was 1% growth. So correspondingly the electricity production of TPP has reduced. As TPP produces the most expensive electricity, it means decrease in the weighted average cost of electricity,” the economist said and added that the reduction of gas price will also have its influence on electricity price.

Economist Vahagn Khachatryan also thinks that the electricity price can reduce by 10 AMD. The calculations based on which electricity and gas prices were defined are not in line with the Armenian reality.

“Both electricity and gas prices are calculated by the logics of old Soviet planned economy. According to our calculations, today the gas price in Armenia can reduce from 156AMD to 100AMD, and the electricity price can reduce approximately by 10AMD. Electricity producing and gas importing company can show much expenses but it does not mean that the price should increase,” the speaker said.

Vazgen Safaryan,President of the Union of Domestic Manufacturers, emphasized that 

PSRC launched the price reduction procedure by his initiation and said. “Taking into account the gas price reduction application the changes would occur but the problem is how much will be enough for our industry and population. Taking into account the external dangers, the prices should be reduced maximally. The electricity price issue will be discussed also in the Public Council. Whether the price will reduce by 5, 6 AMD is very approximate and not essential. I think it is important that the price is calculated without accumulating the expenses as there are some expenses which the company should not involve in the price,” Safaryan said.

Economic Analyzer Hayk Gevorgyan said that the calculations of reducing by 5, 6AMD are not approximate. “There are concrete calculations that PSRC uses. They are simple calculations and we also can do it,” Gevorgyan said and reminded that two audits were conducted in PSRC and ENA but the results are not complete.

“The most essential audit was not conducted, that is the operational audit. They should have checked every expense that ENA did and involved it in the price. The Government did not touch this issue at all. And as they did everything not to check it I have big doubts that there is soothing to check. When the price was increased to 39AMD, it should have been checked if 39AMD was the right price. Maybe it should be 20AMD instead of 39,” Gevorgyan said. 

Arevik Sahakyan, Events Coordinator at “Media Center”

To contact the author please send an email to areviksahakyan@mail.ru

 

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