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Armenian Energy Prices ‘Reduced’


Armenia - Armenians demonstrate on Yerevan's Marshal Bagramian Avenue against a controversial electricity price hike, 26Jun2015.

Armenia - Armenians demonstrate on Yerevan's Marshal Bagramian Avenue against a controversial electricity price hike, 26Jun2015.

One year after sanctioning an increase in electricity prices and thereby triggering dramatic street protests in Yerevan, Armenian utility regulators decided on Friday lower the tariffs by at least 5 percent.

It is not yet clear, however, whether most households in Armenia will pay less for electricity. They will actually pay more if the Armenian government and the new owner of the national electric utility stop subsidizing the prices this summer.

The subsidy introduced last summer largely nullified a nearly 17 percent surge in the prices that was approved by the Public Services Regulatory Commission (PSRC) in June 2015. The highly unpopular measure sparked weeklong nonstop protests in Yerevan.

The protesters dismissed government arguments that the Electricity Networks of Armenia (ENA) utility needs to be compensated for its mounting losses. They said that the losses primarily resulted from corruption and mismanagement.

The daytime electricity price for Armenian households was supposed to rise from 42 to almost 49 drams (10 U.S. cents) per kilowatt/hour. The subsidy, valid until August 2016, has kept it unchanged for the vast majority of households so far.

The energy tariff is being subsidized by the government and Samvel Karapetian, a Russian-Armenian tycoon who bought ENA in September. They have yet to announce whether the subsidy will be extended.

The PSRC said, meanwhile, that the nominal tariff fall by almost 2.6 drams, to 46.2 drams per kilowatt/hour starting from August. It attributed the decision to a recent decrease in the price of Russian natural gas. The regulatory body also argued that the new ENA owner has already managed to cut the company’s losses.

Garegin Baghramian, a senior PSRC commission official, said the commission could not have approved a steeper price cut because the Metsamor nuclear power plant generating more than one-third of Armenia’s electricity will be twice stopped for capital repairs this fall and in the spring of 2017. ENA will have to buy more expensive electricity from thermal power plants during Metsamor’s stoppage, he said.

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