Armenia’s Regulators Fine Russian-Owned Electric Utility Company

Armenia's Public Service Regulatory Commission meet on June 17, when the electricity rate hike was instituted
Armenia's Public Service Regulatory Commission meet on June 17, when the electricity rate hike was instituted

Armenia’s Public Service Regulatory Commission meet on June 17, when the electricity rate hike was instituted

YEREVAN (—Just days after facing mass protests against an electricity price hike, Armenia’s troubled power distribution network was fined 60 million drams ($126,000) on Wednesday for what state regulators called a violation of consumer rights.

The Public Services Regulatory Commission (PSRC) penalized the Electricity Networks of Armenia (ENA) utility for demanding earlier this year advance payments from residents of newly built houses and apartment blocks needing access to electricity.

The ENA’s embattled chief executive, Yevgeny Bibin, ordered such payments in March in addition to regular connection fees collected from new consumers. The Russian-owned company promised to deduct corresponding sums from their electricity bills for the next few years.

Many of those home owners seeking power supplies rejected the ENA’s extra charges, leading the PSRC to investigate the matter.

Bibin told the commission that he rescinded his order on June 23 even though he believes that it was justified given his company’s grave financial situation. “Is that right or wrong? That is certainly bad for consumers,” he said.

Robert Nazarian, the PSRC chairman, rejected the explanation. “If you decide what is right and what is wrong, then why are you dealing with this commission in the first place?” said Nazarian. “You can give yourself orders and ignore Armenia’s laws and regulations.”

Bibin was conspicuously absent from the PSRC’s previous meeting on June 17, which resulted in a more than 17 percent increase in electricity prices in Armenia. The ENA had been pushing for a 40 percent increase.

Yet even the more modest price hike approved by Nazarian’s commission was enough to trigger angry street protests in Yerevan and other parts of the country. On June 22 thousands of mostly young protesters blocked a central Yerevan avenue, demanding a cancellation of the unpopular measure.

The nonstop demonstration led President Serzh Sarkisian to announce on June 27 that his government will subsidize the energy tariffs to ensure that Armenians do not pay more for electricity for now. He also announced an upcoming international audit of the ENA aimed at determining whether the company’s massive losses are the result of corruption among its employees.

Sarkisian further hinted that the government could nationalize the ENA or help its Russian parent company, Inter RAO, sell it to another firm.

Inter RAO denied on June 29 Russian press reports that it is already holding talks with potential buyers. The ENA spokeswoman in Yerevan, Natalia Sarjanian, reiterated that denial on Wednesday.

Citing unnamed sources, the Yerevan newspaper “Haykakan Zhamanak” insisted earlier in the day that the ENA’s sale to a company owned by Russian-Armenian businessman Samvel Karapetian is imminent.


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