Poor power quality causes 23 mln euros of damage to industries, study

TIRANA, Dec. 13 – Albania’s business community represented by Konfindustria describes the current contract with private electricity distribution operator CEZ as totally unacceptable, leaving businesses unprotected against possible damage they suffer because of the poor service estimated to cause dozens of millions of euros of damage annually.
In a forum held last weekend in Tirana on the legal assessment of the power contract with businesses, Konfindustria representatives reiterated that the current contract does not even meet standards of the Albanian legislation in force.
Presenting the results of a study covering the first 10 months of this year, Konfindustria officials said the damage suffered by the industrial sector alone was more than 23 million euros until last October. The study shows the economic damage was caused by poor quality of electricity supply including voltage fluctuations and frequent power cuts affecting the sectors’ raw material, processing, machinery and deadlines.
Konfindustria’s administrator Gjergj Buxhuku said the 23 million euro damage, identified only in 8 sectors, could be far bigger if agriculture, small businesses and household consumers are taken into account.
Konfindustria, which has been pushing for legal changes to the power contract obliging CEZ to take responsibility for damage because of poor service, says such an initiative is obligatory after the privatization of the electricity distribution operator (former OSSH) since more than one year and its current operation under monopoly conditions.
Agreeing in principle to Konfindustria’s requests, representatives of the Energy Regulatory Agency said the decision making body had already started the preparatory process to improve the legal contract with CEZ and bring it under EU standards.
Consumer protection NGOs have also requested changes to the contract with CEZ, demanding legal protection and compensation in case of damage because of poor service quality.
Last week, Albania’s Energy Regulatory Agency (ERE) decided to keep electricity prices for 2011 unchanged, turning down requests by the three local operators which would increase power prices by an average of 12 percent.
ERE’s board of Commissioners decided to continue applying the two-tier price level, under which Albanian households will pay 7.7 lek/kWh for a consumption of up to 300 kWh a month and 13.5 lek for each kWh they consume above the 300 kWh threshold.
However, the ERE decision obliges state owned electricity producer KESH to sell energy to private distribution operator CEZ at 1.48 lek kWh starting from next January, down from 2.03 lek currently, considerably increasing the Czech company’s revenues which had desperately demanded price increase to handle rising costs and new grid investments.