CEZ application to affect consumers above 300 kWh threshold

TIRANA, Sept. 28 – The 4.5 percent increase in electricity prices CEZ Shperndarje has applied for will mostly affect households consuming above the 300 kWh per month household. The Czech-owned company possessing the majority stake of the power transmission operator has proposed the Electricity Regulatory Entity to increase the tariff for every kWh consumed above the 300 kWh threshold to 14.2 lek, up from 13.5 lek currently, and the tariff for the up to 300 kWh tier to 8 lek/ kWh, from 7.7 lek currently. Meanwhile, state-owned Albanian Power Utility, KESH, has demanded a 200 percent increase because of unfavourable hydro-situation and deteriorating finances. On Sept. 1, Albania’s power distribution operator, CEZ Shperndarje applied for a 4.5 percent increase in electricity prices for next year citing high inflation rates, increased price of imported electricity and rising power meter costs. The application has already been submitted to the Energy Regulatory Entity (ERE) which is the decision-making body, but will have to undergo public hearings with all interest groups before ERE takes its final decision early next December. Last December, Albania’s Energy Regulatory Agency (ERE) decided to keep electricity prices for 2011 unchanged, turning down requests by the three local operators who had wanted to 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. Back in 2009, CEZ had requested a 24 percent price increase in electricity for 2010 but the Energy Regulatory Entity approved only a 13 percent increase which entered into force on January, 1 2010. CEZ Shp쳮darje, a subsidiary of ČEZ Group since 2009, owns and operates the entire 110kV distribution network in the country for a total length of 69,000 kilometers, serving around 1.1 million customers. In March 2009, CEZ signed a contract with the Albanian government after buying 76 percent of OSSH’s state-owned shares for 102 million Euros. Low rainfall has severely affected domestic electricity production during the first half of this year in Albania. Data published this week by the country’s Institute of Statistics (INSTAT) show domestically produced electricity dropped by 45.1 percent year-on-year during the first half of 2011. The situation was a result of the drop in hydro-electricity production which accounts for 96.1 of total domestic production.