TIRANA, Nov. 22 – The decision on whether electricity prices will increase again next year will be taken on December 7, the Energy Regulatory Agency, ERE, said last week after holding a hearing with the three electricity operators in Albania.
ERE, which is the decision-making body on electricity prices confirmed that CEZ, the Czech Republic company owning the majority stake in the Albanian electricity distribution operator (former OSSH, current CEZ Distribution) has a applied for an average increase of 12 percent in electricity prices to cover the company’s rising costs and continue its investments.
Meanwhile, state owned companies, Albanian Power Corporation (KESH) and Transmission System Operator (OST) have also submitted requests for increases in their production and transmission tariffs.
CEZ director Josef Hejsek said the Czech company had submitted an individual request for a 0.98 lek/kWh increase in the electricity distribution tariff.
“Our goal is to be in a situation where OSSH will not need to increase prices based on higher company costs. This can be quickly achieved but only through changes and massive improvements in the company’s operations and investments,” said CEZ in a an earlier statement, stressing the need for higher prices to continue scheduled investments.
Under the newly proposed changes, average prices applied to different categories of customers by CEZ would increase to 10.51 lek/kWh, up from 9.53 lek/kWh.
KESH and OST have also requested significant price increases of 55% and 21% for their tariffs to accelerate the payment of their debts.
CEZ Distribution also unveiled its intention to remove the 300 kWh threshold for household consumers, a proposal which has been opposed by the Energy Ministry and consumer protection NGOs.
Albanian households currently pay 7.7 lek/kWh for up to 300 kWh a month and 13.7 lek for each kWh they consume above the 300 kWh threshold.
ERE director Bujar Nepravishta has neither confirmed nor denied a possible increase in electricity prices, whose bills accounts for a considerable amount of income for most pensioners and people in need.
Last Year, 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 starting from January, 1 2010.
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
According to the country’s national statistical institute, INSTAT, losses in the electricity grid continued rising in the first half of 2010. Data show electricity losses increased by 3.7 percent, accounting for 27.2 percent of power available for use. Distribution losses make up the major share of 88.9 percent of losses in the electricity grid.
Konfindustria
Albania’s business community represented by Konfindustria suggests that CEZ should first sign new contracts with electricity consumers before the possible prices increases are adopted. Calling on the Regulatory Agency ERE to take measures on this issue, Konfindustria said the signing of new contracts is an emergency situation considering that CEZ, a monopoly company, continues not taking responsibility for the quality of electricity, and voltage fluctuations.
According to Konfindustria’s administrator Gjergj Buxhuku, improvements in the contracts are a necessity because of the poor quality of power supply which causes million of euros of damage to the domestic industries each year.
“These contracts should first be signed by businesses and then by households,” said Buxhuku, adding that Konfindustria’s request was based on EU standards requiring the electricity provider to assume responsibility on possible financial damage from the quality of electricity.
