By Shakeh AvoyanExports of Armenian electricity to neighboring Georgia, which were due to nearly triple this week, may now stop altogether due to a government-sanctioned surge in the cost of its transmission to the Georgian border, it emerged on Wednesday.
A Russian company that owns Armenia’s thermal power plant and sells electricity to the Telasi distribution network in Tbilisi has raised its supply price after a six-fold rise in transmission fees approved by the Regulatory Commission on Natural Monopolies in Yerevan late last month. The increase was requested by a state-run firm that runs the country’s high-voltage lines.
Telasi has already informed the Armenian-based exporter, the International Energy Corporation (IEC), that it will stop buying the electricity unless the latter sticks to its existing price of 2.54 U.S. cents per kilowatt/hour. “We are sorry to inform you that the Telasi JSC can not agree to your proposals,” its commercial director, Ilia Kutidze, said in a letter faxed to IEC on Tuesday.
Energy officials in Yerevan say the Georgians will be charged 2.61 cents per kilowatt/hour after the measure takes effect on Thursday. However, a Telasi spokesman was quoted by the Georgian Caucasus Press news agency as saying that the price will soar by as much as 30 percent.
The disagreement could not have come at a worse time for Georgia which remains gripped by a severe energy crisis and suffered this week a massive blackout triggered by a breakdown at its strategic Inguri hydro-electric station. Much of Tbilisi and the regions outside it, which already had electricity for several hours a day, were plunged into darkness on Tuesday. The accident also temporarily disabled a high-voltage line running to Russia, leaving the entire country to rely mainly on 60 megawatts of power delivered from Armenia on a daily basis.
Officials from Armenia’s Hayenergo national power grid said the supplies were to be halted the previous night due to the price dispute but will continue for the time being at the request of the Georgian side which has not yet finished repairs at Inguri.
The IEC vice-chairman, Mels Hakobian, confirmed the information. “If we cut off power, Georgia would be in a terrible situation,” he told RFE/RL.
Meanwhile, Georgia’s Minister of Fuel and Energy Mamuka Nikolaishvili and the Telasi chief executive, Dangiras Mikolayunas, are due to arrive in Yerevan on Thursday to discuss the situation. Under an agreement signed by IEC and Telasi last November, the Tbilisi operator was to boost the Armenian energy imports to 150 megawatts a day from January 21.
The Georgian side considers the Armenian tariff change a breach of contractual obligations, a view shared by Hakobian. “We risk losing an important market,” he warned, adding that his company can not keep the previous export tariff unless the Armenian regulatory body reconsiders its December 22 decision.
Interestingly, both companies are owned by Russia’s RAO Unified Energy Systems (UES) utility that began last year aggressively expanding into the South Caucasus and Eastern Europe in line with Moscow’s drive to reassert influence on its former Soviet satellites. UES has decided to almost double its power supplies to Georgia to 400 megawatts to ease the latest crisis, Itar-Tass news agency reported.
UES was granted last year the ownership of the Hrazdan thermal plant and took over the management of Metsamor nuclear power station as a result of the so-called equities-for-debt swap agreements signed by the Armenian and Russian governments. Visiting Yerevan in October, the company’s prominent boss, Anatoly Chubais, vowed to turn Armenia into the region’s leading energy exporter, claiming that the Russians could sell its electricity surplus to Azerbaijan and Turkey even before a resolution of the Nagorno-Karabakh conflict.