The energy regulator also plans to continue the application of fixed-rate billing because of the high number of informal buildings and lack of meter readers.
TIRANA, April 2 – Albanian households will face an increase in electricity prices next year. The energy regulator ERE has warned the two-tier billing system will be lifted by the end of this year and unified prices be set for all household consumers.
The reform will affect around 80 percent of household consumers who consume up to 300 kWh/month and are charged at lower tariffs.
In a recent hearing in Parliament, Petrit Ahmetaj, the head of the ERE energy regulator, said the current system had led to abuses. He said CEZ Shperndarje distribution operator had been facing difficulty with the two-tier system because of the metering system. “The system also leaves room for abuses with consumers,” said Ahmetaj.
Energy Minister Damian Gjiknuri has also stressed the necessity of the reform, but pledged compensation for the families in need.
The energy regulator also plans to continue the application of fixed-rate billing because of the high number of informal buildings and lack of meter readers.
Last December, ERE approved a decision which allows CEZ distribution operator to apply fixed-rate billing to household consumers without power meters or damaged ones. ERE said the return of fixed-rate billing was a forced measure considering that 20 percent of electricity consumers remain unequipped with power meters or have damaged power meters.
Albania’s energy regulator, ERE, has ruled power prices will remain unchanged even for 2014, but said it might review them for 2015 considering the huge losses in the distribution system where around half of the electricity fed into the grid goes unpaid because of thefts and the dilapidated network
ERE officials say they will 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 (VAT excluded). Average tariffs for business consumers vary from 8.5 lek/ kWh to 10 lek kWh based on low or medium voltage power access. Meanwhile, state institutions pay 11.5 to 14 lek kWh.
Power prices during the past six years have increased by 63 percent climbing from an average of 5.71 kWh in 2005 to 9.53 lek kWh currently.
Albania is one of the few European countries where power prices have remained unchanged in the past three years but yet prices are higher than in several EU and EU aspirant countries, according to a previous Eurostat report.
Albania’s electricity prices are higher than five European countries although its GDP per capita stands on the bottom of a 37-country list, according to the Eurostat, the statistical office of the European Union. At Euro 0.116/kWh, household electricity prices in Albania are higher than EU member Bulgaria, potential candidate Bosnia and Herzegovina and EU candidates Macedonia, Montenegro and Iceland.
Average electricity prices in the EU-28 stood at Euro 0.2/kWh in the first quarter of 2013, up from Euro 0.189/kWh during the same period in 2012.
In its latest country report on Albania, the IMF warns structural problems in the electricity sector are a source of fiscal and growth risks.
“Albania’s hydroelectric endowment should enable it to be self-sufficient. However, poor collection, electricity theft, and low quality grid affect the sector’s viability. As a result, the state producer has either run down the reservoir in dry years or imported electricity, either by issuing state guarantees (that are often called), or direct budget support. The lack of payment discipline by consumers has also discouraged investment in new generation capacity,” says the IMF.
