The topic of “Face to face” series of talk show of Aravot online is discussed between NA MP Michael Melkumyan (PAP) and the Chairman of the Republican Union of Employers of Armenia, Gagik Makaryan.
Aram Abrahamyan – Since August 1, apparently, the electricity tariff will increase. The Chairman of the Public Services Regulatory Commission, Robert Nazaryan, has mentioned that the increase will be approximately 10 percent. For the average Armenian consumer, according to Mr. Nazaryan, it will cost 8-9 thousand drams per year. Let’s compare these two figures. Does it mean that the average Armenian family was spending 80-90 thousand drams per year on electricity?
Michael Melkumyan – I think we need to be really profound in numbers; they do not inspire confidence. We, our faction, have also met with Mr. Nazaryan. There are substantiations, of which I have spoken still in January or February at the National Assembly plenary session. We have “Electric Networks of Armenia” monopoly, which represents a distribution function, and we have also generating capacities. Armenia’s energy balance is approximately 7-7.5 billion kW/h electricity per year, of which 1-1.5 billion we export to Iran. We have the hydro energy, approximately 32-33 percent; we have Nuclear Power Plant and two thermal power plants, the Yerevan and Hrazdan Thermal Power Plants are producing approximately equal proportions of electricity. The first basic argument for increasing the tariff is that last year, the plant stopped for a planned shutdown for around 88 more days. Secondly, it has not been a high precipitation year, and hydropower plants had produced much less energy. According to the procedures defined by the law, in the beginning the cheapest electricity should be acquired; it is from the nuclear power plant without value added tax – 5-5.5 drams, then from hydropower, the average weighted tariff here ranges from 10-12 drams, and thirdly, from thermal power plants. Thus, because of these 2 problems, the “Electric Networks of Armenia” has obtained a lot of electricity from thermal power plants. The next argument is that starting from this year, the Armenian nuclear power plant should commence the process of increasing its security and operation capacities, and spend a lot of money, and it should be included in the tariff. Then, the Yerevan thermal power plant should start repaying the loans, whereas Razdan Thermal Power Plant also has expenses to make, capital repairs. They present such a complex basket, are adding and getting that it incurs a gap of 20 billion drams with “Electric Networks of Armenia”, therefore, we increase the tariff to cover it.
A. A. – As a reason, I would also illustrate that earlier we were selling electricity to Georgia, now Georgia has found another source, therefore, it is left with us, and we cannot consume all of it, because our population is becoming less.
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Gagik Makaryan – If nowadays Armenia’s economy and population cannot consume produced energy because of leaving the country, it does not mean that the business is to be blamed, but we, the consumers. Secondly, if we have privatize the networks, then certain obligations and responsibilities on the owner are defined, which should be implemented at a certain period of time to upgrade the system, increase the efficiency, eliminate possible failures or preventive functions and other. Now, look what it turns out today. I bring the example of my district or my house. All the wires that were installed in the 90s, who and how has installed in their own efforts, changing a pole or the meter to another place is carried out mainly at the expense of the citizen, “Electrical networks” almost does not want to spend a penny, moreover, they want money for the technician to come and change the place. In other spheres of business, the business entity itself is covering the costs for its production, upgrading, and maintaining its position in the market. Whereas the owner of the distribution network, since it has the status of a natural monopoly, does not take care of its upgrading, in other words, it is thinking that it may work as it wants, and in case of having losses, it will impose on everyone, will increase the cost, and I will live quietly.
Prepared by ARAM ABRAHAMYAN
“Face to Face” talk show series are released by the Open Society Foundations- Armenia. The views and analyzes found in this broadcast express the opinions of the participants, and are not approved by the Open Society Foundations-Armenia, or its Board. This broadcast is made available thanks to comprehensive financial support by the Open Society Foundations-Armenia, under the mass media support program, grant No 18624.
