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Energy Price Rise Inevitable, Says Armenian Regulator


Armenia - A newly refurbished energy distribution facility in Gyumri, 13Sep2014.

Armenia - A newly refurbished energy distribution facility in Gyumri, 13Sep2014.

Armenia’s chief public utility regulator said on Tuesday that the prices of electricity in the country will again rise soon despite strong resistance from opposition parties and many ordinary Armenians.

The Electricity Networks of Armenia (ENA) utility last month asked the Public Services Regulatory Commission (PSRC) to raise the tariffs by as much as 40 percent, citing its continuing financial losses and outstanding debts. The PSRC is currently looking into the request.

“As a result of the ongoing review of the tariffs, [electricity] will become more expensive,” Robert Nazarian, the commission chairman, told reporters. “To what extent? I’m not prepared to talk about that today.”

Nazarian described a sizable depreciation of the Armenian dram against the U.S. dollar as the main factor behind the impending price rise. “As you will recall, our last tariff revision in 2014 was based on an exchange rate of 1 dollar per 407.6 drams,” he said. “Today [the dollar] is worth 480 drams.”

Energy and Natural Resources Minister Yervand Zakharian has cited similar arguments in recent weeks. Critics dismiss them, saying that the ENA’s financial troubles result from poor management and extravagant expenses, rather than the existing electricity fees.

Nazarian insisted that the higher energy price planned by the PSRC will carry “no element of luxury” attributed to the ENA management.

The Russian-owned power distribution network has specifically come under fire for renting expensive cars and office space for its senior personnel. It had to disclose those expenditures in its tariff application filed with Nazarian’s commission.

The ENA’s operations appear to have prompted concern also from lawmakers from the ruling Republican Party of Armenia (HHK). They met with the ENA’s Russian chief executive, Yevgeny Bibin, on Tuesday to demand more detailed explanations for the highly unpopular measure sought by the company.

Zakharian also took part in the meeting that lasted for more than three hours. Neither he nor Bibin agreed to talk to reporters afterwards.

Last Wednesday thousands of people marched through downtown Yerevan to protest against the planned price hike. A non-partisan pressure group that organized the protest said it will rally even more supporters on June 19.

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