State-owned Albanian Power Corporation (KESH) and transmission system operator (OST) are also expected to file requests for an increase in electricity prices
Tirana Times
TIRANA, Sept. 5 – Albania’s power distribution operator, CEZ Shperndarje has 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. In its official application, CEZ Shperndarje cites inflation rate which in 2010 was at 3.6 percent, and increased cost for power meters, making their certification by an independent laboratory compulsory.
“The cost for the certification of power meters is estimated at 2 percent out of the 4.5 percent increase we have requested,” Erideta Bashi, a senior CEZ official told reporters last weekend.State-owned Albanian Power Corporation (KESH) and transmission system operator are also expected to file requests for an increase in electricity prices.
ERE officials say a detailed study will be carried out on CEZ’s request analyzing the company’s performance in investments and costs before the decision is taken.
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.
However, the ERE decision obliged state-owned electricity producer KESH to sell energy to private distribution operator CEZ at 1.48 lek kWh starting in January, down from the current 2.03 lek.
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.
Albania’s electricity distribution operator, whose majority stake is owned by the Czech Republic’s CEZ, has recently signed a 100 million Euros loan agreement with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation that will refurbish the distribution network and improve the quality of electricity supply. Since the beginning of its operations in Albania, the EBRD has invested over 570 million Euros in various sectors of the country’s economy, mobilizing additional investments of more than 1.3 billion Euros.
CEZ Shp쳮darje, a subsidiary of ɅZ Group since 2009, owns and operates the entire 110kV distribution network in the country for a total length of 69,000 kilometers, and serving around 1.1 million customers.
CEZ Shperndarje says investments in Albania’s distribution network in 2010 grew to 4.5 billion lek (USD 45 million), up from 3.9 billion lek in 2009. The 2011 investments are estimated at 4.9 billion lek. CEZ says electricity losses in 2010 dropped to 30.4 percent, down from 33.92 percent in 2008 and 2009. Its bill collection rate also slightly improved to 78 percent compared to 76 percent in 2009.
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.
