Electricity More Expensive Only in Moldova: Economist on Expected Tariff Rise in Armenia

As regards the electricity tariff increase in Armenia general attention is directed to Electric Networks of Armenia (ENA); however, the attention should be drawn to all the companies that have submitted an application for tariff increases, "Armenian National Congress" party representative, economist Vahagn Khachatryan said during a press conference on Monday, June 1. 

The problem with ENA, according to Khachatryan, is obvious and it has been receiving much spotlight in the press; on the other hand, no one talks about the other companies: “As if it's normal for companies to come out with their proposals, thereby increasing the likelihood of increase in the electricity tariff.”

First of all, the economist said, it concerns “High-Voltage Electric Networks” (HVEN) company, the objective of which is the transmission of energy from producers to ENA (HVEN has proposed to increase the shipping cost of 1 kW. from 1.63 to 2.44 drams – Epress.am).

"Looks like we are going back to the Soviet Union. There existed a method of calculating the tariff, according to which the expenses incurred during the year were considered to be the basis, and to this were added other expenses,” Khachatryan said.

At the same time, according to the economist, in Soviet times the purchasing power of citizens was also calculated: "If they raised the electricity tariff, they would raise the salaries accordingly.” 

“What do the representatives of current authorities usually do? They say we have the cheapest gas, the cheapest electricity. But compared to who? It might be cheap compared to Denmark, Sweden, or Germany. But when compared with our purchasing power, that is, how much can be bought with the average salary, it appears that we are in the second last place after only Moldova. On an average salary we can buy 3,300 kilowatts of electricity. Until the recent rise in prices it was 3700,” Khachatryan said. 

When a company submits an application to increase the tariff, he added, it must also submit a business plan, which, however, Armenian companies do not do. Experience over the last three years shows that the more expensive the electricity gets, the more financial-economic situation of the company deteriorates, as people begin to consume less power. 

“What does HVEN want to achieve? They want to create a system in poor Armenia, where they will have to spend 100 million on compulsory insurance of their employees. To put such a goal in a poor country is to destroy its economy,” Khachatryan said.