The government subsidises big industries

TIRANA, June 5 – Gjergj Bojaxhi, the CEO of the Albanian Power Corporation (KESH), declared that low electricity prices is a hidden subsidy to the big industries in Albania. In the last few years, the main businesses in Albania have complained that the price of KESH is higher than the price of energy in the regional market. Therefore, their competitors in the region have an advantage over the Albanian businesses. However, Bojaxhi rebuffed the claims of the Albanian business community. “The industrial giants have the right to import electricity without using KESH as an intermediary, but until now, no one has done it because the power supplied by KESH has a lower price”, Bojaxhi said.
Bojaxhi said that complaints by the Albanian industry were justified until 2005. At that time, most energy was generated from Albanian power plants and the prices of imported energy were lower than the price of KESH. Therefore, the Albanian Power Regulatory Board decided to allow the large energy users to import according to their needs or to continue to be supplied by KESH at reduced rates. However, most companies chose to import energy for only a limited period.
ERE decided that KESH should supply Albanian businesses with energy priced at between ALL 5.2 and 7.5 per kWh. Some companies are supplied by KESH at even lower prices. KESH calculates that the cost of one kWh is ALL 9.78 without including the transmission cost, maintenance of power grid, and other costs. The price of imported energy is around ALL 10 per kWh. Therefore, the state is paying ALL 1.5 for each kWh of energy used by Albanian residential customers and businesses.
State institutions, including schools and hospitals, are paying ALL 12 per kWh energy. Their price is higher than the price of imported energy. It is calculated that the state institutions use between one-third and one-forth of all the power used in Albania. The special high price for state institutions were introduced in 2002 to boost, artificially, the percentage of energy billed and collected by KESH.