Consumers to pay for PSRC forecast mistakes

The financial deficit of Electric Networks of Armenia (ENA) Company is due to the fact that after repairs one of the units of Armenian Nuclear Power Plant was put into operation again following an 88-day delay so the lack of cheap electricity was completed by expensive electricity produced by the Hrazdan Thermal Power Plant (TPP). Chairman of Armenia’s Public Services Regulatory Commission (PSRC) Robert Nazaryan said that today during hearings initiated by the Armenian parliament’s Standing Committee on Economic Affairs in connection with the review of electricity tariffs.

Deputy of Republican Party of Armenia (HHK) faction, Chairman of the Standing Committee on State and Legal Affairs Hovhannes Sahakyan asked R. Nazaryan why cheap electricity was not bought from Yerevan Heat Station instead of expensive power of the Hrazdan TPP.

“Yes, we lacked 300 million kwh for 88 days, but we could not use power of Yerevan Heat Station because it had no reserve, while the Hrazdan TPP generating expensive power had reserve and could produce electricity for the whole territory of Armenia,” Nazaryan replied.

For her part the secretary of Prosperous Armenia (BHK) faction Ms. Naira Zohrbyan said it would be fair if the hearing was attended by representatives of those companies whose poor management makes society discuss the electricity tariff rise from August 1.

“Tell us at what price ENA Company was selling electricity, what investments ENA promised to make over these years and how much investment was made and, eventually, if masochists agreeing to work at zero profit are employed by those companies,” N. Zohrabyan said.

“Please tell us where it is written that the consumer – the Armenian citizen should repay that sum as a result of poor management,” she added.

Robert Nazaryan reminded those present that in 2002 Electric Networks of Armenia was sold for $40 million. Following the sale, until 2006-2007, ENA did not make investments. Then the company owner changed. Since 2007 investments of $80 billion drams were made.

The most part of investments are aimed at ensuring uninterrupted power supply and reducing power cuts to the time indicated in the license, that is, power cuts in Yerevan shall not continue longer than 2 hours.

“The rise in tariffs is not conditioned by poor management, we calculated wrongly. All these companies operate at a zero or little profit,” the PSRC chairman said.