TIRANA, May 4 – More than 50,000 household and business consumers continue to pay their accumulated unpaid electricity bills over the 2007-2014 period in monthly instalments, says state-run OSHEE distribution operator.
The accumulated debts are being collected under a late 2014 nationwide electricity reform that made the collection of household and business debts compulsory and electricity thefts punishable by prison in a tough nationwide campaign that is estimated to have halved grid losses and lifted state-run electricity operators out of collapse. The reform is however estimated to have considerably curbed consumption among poor households not affording to pay off their debts at one time and benefit reduction in their late payment penalties.
In addition to their monthly electricity consumption, household consumers pay a fixed 2,800 lek (€22) a month for their old debts while pensioners and those receiving financial assistance are offered 1,200 lek (€9.3) monthly instalments.
The 54,200 indebted consumers who were paying their loans in monthly instalments at the end of the first quarter of 2018 represent only about 5 percent of total 1.2 million electricity contracts in the country.
The OSHEE distribution operator says about 346,000 debtor consumers paid off their debts at one time since December 2014, benefiting 70 to 80 percent discounts in their late payment penalties.
The state-run operator says its grid losses dropped to about 28 percent in early 2018, down from a record high of 50 percent in early 2013 when the operator was brought back under state control following a failed short-spell privatization by Czech Republic’s CEZ.
However, the company’s principal amount of bad debt for 2007 to 2014 bills is estimated to have dropped by only about 30 percent in the past three years and remains huge at about 47.8 billion lek (€371 million) and little likely to be recovered as many of the debtor businesses have gone bankrupt and a considerable number of debtor households are among those who left the country during the past four years of the asylum exodus when about 100,000 Albanians are estimated to have left the country.
Almost half of Albania’s population lives in energy poverty, recognized as spending more than 10 percent of household income on energy, according to a World Bank report.
The situation reflects the high prices charged on electricity to households in one of Europe’s poorest countries although the country meets the overwhelming majority of up to 80 percent of its needs through domestic hydro electricity generation depending on favourable weather conditions.
A survey by a local Albanian NGO has found two thirds of Albanian households say they face difficulty in paying off their monthly electricity bills and massively undertake actions to reduce their electricity consumption, especially during winter, something which practically places them under energy poverty.
The situation is also a result of poorly insulated buildings, lack of central heating systems and electricity massively used for heating and cooling facilities.
At €0.0824/kWh (tax included), Albania’s household electricity prices in 2017 were twice lower compared to the EU 28 average of €0.2, but higher compared to several regional countries including Serbia, Kosovo and Bosnia and Herzegovina, according to Eurostat, the statistical office of the European Union.
