Utility regulators formally raised the prices of electricity in Armenia by over 16 percent on Wednesday as dozens of people scuffled with riot police in Yerevan in protest against the unpopular measure expected to spark larger anti-government demonstrations.
The decision unanimously made by the five members of the Public Services Regulatory Commission (PSRC) also failed to satisfy Armenia’s Russian-owned power distribution network. The Electricity Networks of Armenia (ENA) operator has been seeking a more than 40 percent increase in the prices of its electricity delivered to households and corporate consumers, citing the need to end its massive losses.
The PSRC chairman, Robert Nazarian, said earlier this month that the daytime electricity price for households will rise from 42 drams to almost 49 drams (10 U.S. cents) per kilowatt/hour. The households will pay almost 39 drams per kilowatt/hour during night hours, he said.
The commission formalized these tariff increases, effective from August 1, in the presence of other government officials, journalists and anti-government activists. The latter responded by chanting “Shame!”
Dozens of other activists, most of them young members of the opposition Armenian Revolutionary Federation (Dashnaktsutyun), protested outside the PSRC offices in downtown Yerevan. Scuffles broke out as riot police stopped them from breaking into the building after the announcement of the PSRC’s decision.
Some protesters threw eggs and tomatoes at law-enforcement officers led by Valeri Osipian, a deputy chief of the Yerevan police. Six of them were detained as a result. They all were set free later in the day.
A much larger number of people took to the streets of the capital late last month to protest against the impending price hikes. A non-partisan pressure group that organized the protest is scheduled to again rally supporters on Friday.
The protesters’ anger reflected a widely held belief in Armenia that the ENA is forcing consumers to pay for its perceived mismanagement.
Speaking during parliamentary hearings last week, Nazarian acknowledged that the ENA management has failed to tackle fraud within its ranks and indulged in extravagant expenses such as lease of expensive cars and office space for senior company executives.
Still, Nazarian insisted that the ENA, which is owned by Russia’s UES national electric utility, cannot stop incurring substantial losses with the existing electricity prices. He said higher tariffs are also need to enable the ENA to repay 106 billion drams ($225 million) in outstanding debts to power plants and commercial banks.
The ENA, meanwhile, criticized the price rises approved the regulators as not far-reaching enough. In a letter to the PSRC sent ahead of its latest meeting, the ENA’s Russian chief executive, Yevgeny Bibin, accused the commission of ignoring most of its “economically justified operational costs.”
Bibin warned that his company will not be able to meet the necessary “requirements for the quality and reliability of electricity supplies” if the PRSC refuses to accept its tariff application in full. Nazarian publicly condemned the warning as “blackmail.”
The daytime electricity price for households already went up by 27 percent in July 2013 because of the increased cost of Russian natural gas generating more than one-third of Armenia’s electricity. The PSRC raised it by another 10 percent in July 2014.