TIRANA, Jan. 5 – Household and business consumers will face higher electricity prices for 2015, according to a decision by the country’s energy regulator announced just after Christmas.
Around three-quarters of Albanian households with a monthly consumption of up to 300 kWh are expected to face higher prices from the decision which lifted the threshold applying lower tariffs and imposed a unified tariff.
The energy regulator ERE has ruled the unified electricity price will be at 9.5 lek (11.4 lek VAT included)/kWh (Euro 0.08) which will affect all consumers with a monthly consumption of up to 450 kWh and charge lower bills to those with a bigger consumption due to the lift of the previous 13.5 lek/kWh tariff for every kWh above the 300 kWh threshold.
Business consumers will also face higher electricity prices starting from January 2015 except for bakeries and flour mills whose prices have remained unchanged at 8.52 lek (VAT included).
Electricity prices for businesses connected to the 35 kW grid have increased by 12 percent to 11.4 lek/kWh (VAT included).
Electricity tariffs for businesses connected to the 6/10/20 KW grid have been unified at 13.2 lek, increasing by 8 to 21 percent.
The unified price for businesses connected to the low tension has been set at 16.8 lek (VAT included).
The ruling Socialist Party-led coalition claims the lift of the two-tier billing system will remove abuses and reduce complaints by household consumers.
Prime Minister Edi Rama says some 210,000 families in need with a monthly consumption of 300 kWh will be compensated 650 lek/month due to higher bills.
Meanwhile, the opposition Democratic Party says 76 percent of Albanian households will face a 24 percent price hike in electricity bills.
An annual report by energy regulator ERE shows the number of Albanian households with a monthly consumption of 300 kWh rose to 76.3 percent in 2013, up 1 percent compared to 2012. Household electricity consumption accounted for 57.6 percent of the total in 2013.
The increase in electricity prices had also been recommended by the IMF and the World Bank which are assisting the Albanian government bring back the economy to sustainable growth after moderate growth of around 2.6 percent annually during the 2009-2013 crisis years compared to a pre-crisis decade of an average 6 percent, when it was one of the best performers in the region, according to INSTAT.
In Albania power prices, which take a considerable part of households’ monthly income, had remained unchanged since the end of 2009 when the Energy Regulatory Entity (ERE) approved the latest increase in electricity tariffs. Yet, the electricity prices in Albania are relatively high considering that Albania has the lowest GDP per capita expressed in purchasing power standards.
Albania’s household electricity prices are higher than in six European countries, although the country’s GDP per capita, an indicator of the standard of living, is among the lowest in Europe, according to data by Eurostat, the statistical office of the European Union. At Euro 11.5 per 100 kWh, Albania’s household electricity prices including VAT at 20 percent, are higher than in Serbia at Euro 6.1, Macedonia at Euro 7.8, Bosnia and Herzegovina at Euro 8, Bulgaria at 8.8 Euros, Montenegro at 10.5 Euros and Iceland at 10.9 Euros.
The Albanian hydro-dependent electricity system is now wholly state run after a deal settling the dispute with Czech giant CEZ group which will be paid back Euro 95 million for 76 percent of the shares it bought in the Albanian electricity distribution operator in 2009 for Euro 102 million
Government has launched a nationwide campaign to curb thefts in the dilapidated electricity grid which are estimated to cause the state budget around Euro 150 million in annual losses. Dozens of household and business consumers have been arrested over power theft and thousands of others have been paying accumulated debts under new contracts allowing them to pay in monthly installments.
That has brought about a significant increase in money collection amount with people staying for hours to pay the old debts.
The government has offered not to claim 80 percent of the interest over the principal that anyone has not paid if the payment is made immediately, but until end of February. Or debtors could agree to make the delayed payments in monthly installments no less than 2.500 leks not including the regular use of that month.
Retail distributor OSHEE needs to bring its debt down to 22 percent in 2015.
ERE chairman Petrit Ahmeti said businesses using 35 kV electricity will start paying 9.5 lek per kWh from 8.5 lek per kWh throughout 2015, the price they used to pay at peak hours.
Industrial, agriculture, trade and service businesses using 20, 10 and 6 kV electricity will be paying 11 lek per kWh. They had paid between 8.7 lek per kWh and 10 lek per kWh.
Businesses using 0.4 kV electricity will be paying 14 lek per kWh, while bakeries 7.5 lek per kWh, Ahmeti said.
The government said on overage the prices will not increase, a claim that has been disputed by political opponents and independent observers.
Pensioners, socially assisted people and other poor families will profit a compensation starting immediately. Such families numbered about 200,000, and the government said and that means they will practically not be negatively affected by the new price.
