By Atom Markarian
A state body regulating public utilities refused on Tuesday to allow a sharp increase in the price of electricity supplied by the Metsamor nuclear plant that meets much of Armenia’s energy needs. The Metsamor management wanted the fees levied from the Hayenergo power grid to be raised from 7.1 drams to 12.8 drams (2.3 U.S. cents) per kilowatt/hours, arguing that it needs additional revenues to further boost the plant’s safety and pay for Russian nuclear fuel. However, the Regulatory Commission on Natural Monopolies agreed to set the tariff at only 7.6 drams.
A top Metsamor executive, Vanik Nersisian, reacted angrily to the move, warning commission members that “something bad could happen to the atomic plant.” His boss, Gagik Markosian, was more cautious, though, assuring reporters that the plant’s sole operating reactor will remain safe. But he too was unhappy with the decision.
“We are really dissatisfied,” Markosian said. “I am 99 percent sure that we will make another bid for a tariff change in six months’ time. The tariff that was offered to us today does not solve even the problem of fuel supplies.”
Metsamor managers noted, among other things, in their December 2 application to the commission that the Russian TVEL supplier has informed them about its plans to raise the price of nuclear fuel by 20 percent in 2004. The Soviet-era facility has already had difficulty paying for fuel deliveries in the past, running up $40 million in debts to TVEL.
Another Russian firm, RAO Unified Energy Systems (UES), agreed last year to repay the debt in return for obtaining control over Metsamor’s finances. It is unclear whether UES was behind the decision to seek a much higher price for the relatively inexpensive nuclear energy generated in Armenia.
The deputy head of the regulatory body, Nikolay Grigorian, argued that the Russians have not yet officially demanded a higher price for their fuel. He said the approval of Metsamor’s request would have pushed up the retail price of electricity supplied to the population. It is already regarded as too high by many Armenians.
Grigorian also dismissed any serious link between the energy tariff and further safety measures at Metsamor, saying that the United States and the European Union will continue to finance them.
Armenian officials said late last year that the U.S. government and the European Commission plan to allocate a total of about $12 million for that purpose. They have already spent over $55 million on Metsamor since its reactivation in 1995.