Armenian Regulators Limit Impact Of Gas Price Hike

A thermal power plant in Hrazdan, Armenia.

YEREVAN (RFE/RL)–Utility service regulators on Monday kept unchanged the price of electricity for Armenian households despite the increased cost of Russian natural gas delivered to the country.

Starting from next month, Armenia will pay $180 per thousand cubic meters of Russian gas, up from $154 charged by the Gazprom monopoly since April 2009. The Public Services Regulatory Commission (PSRC) on Friday approved a corresponding rise in the domestic gas tariffs set by the Gazprom-controlled national gas distribution network, ArmRosGazprom (ARG).

With natural gas used for generating roughly one-third of Armenia’s electricity, the move raised fears of a knock-on effect on energy fees that were already raised almost a year ago. However, the PSRC sanctioned only a modest rise in the cost of electricity supplied to industrial enterprises. It said the electricity price households will remain unchanged at 30 drams (8 U.S. cents) per kilowatt/hour at least until next August.

Robert Nazarian, the PSRC chairman, said Armenia can sustain such a price thanks to the upcoming launch of a new and much more efficient unit at a major thermal-power plant located in Yerevan. Nazarian also noted the fact that it will mainly run on gas supplied from neighboring Iran. But he did not specify whether Iranian gas costs Armenia less than the much more extensive gas supplies from Russia.

Artur Alaverdian, director of Armenia’s second thermal power plant located in the central town of Hrazdan, confirmed that the national power distribution network intends to buy much more electricity from the Yerevan plant this year. The Hrazdan facility uses Russian gas and is owned by a subsidiary of Russia’s state-controlled Unified Energy Systems power utility.

Alaverdian criticized the PSRC’s decision not to raise the key electricity tariff, saying that it was politically motivated. “If the rules of the game were the same for all market players, the price of electricity would have to go up,” he told RFE/RL.


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