Vache Gabrielyan: The first phase of survey shows that electricity tariff growth in Armenia is substantiated

Deloitte & Touche CIS has presented a report, which sums up the results of the first phase of its survey in the energy sector of Armenia. The report demonstrates that the electricity tariff growth is substantiated, Vache Gabrielyan, Deputy Prime Minister of Armenia, Minister for International Economic Integration and Reforms, said at today's session of the Armenian Government. He added that the company is still to conduct the second and the third phases of the survey.  
Gabrielyan said that Deloitte & Touche explored the expenses of electric power distribution and met with the relevant companies and structures.  It has been found out that in the post-Soviet space the electricity tariff is higher in Moldova only. The minister pointed out some problems mentioned by Deloitte & Touche.  "Despite the inexpensive hydro and nuclear generation of electric power, the role of the ultimate plant is the most important. Our ultimate plant is the Hrazdan TPP, whose prime cost is rather high and this also explains the growth in tariffs," he said. 
To note, on September 30, Deloitte & Touche CIS presented a report, which sums up the results of the first phase of its survey in the energy sector of Armenia. According to the report, the PSRC has all chances to curb the electric power price hike in 2016-2017. The report points out the need to divide the maintenance program of the Armenian Nuclear Power Plant (NPP) into two tariff years and to increase the intensity of the Hrazdan-5 power unit. At the same time, to stabilize the situation in the long-term outlook, the regulator needs to determine the internal cost saving reserve and the relevant state structures need to clearly determine the priorities of the sector development, particularly, in construction of new capacities.  The authors of the report point out that in 2000-2015 the electricity tariffs in Armenia were increased for 4 times: in 2009 by 24% and for three times in 2013-2015, when the total growth (70%) was four times as high as the inflation.  The comparison between the tariffs for the population and the inflation growth starting from 2000 has revealed parity. The share of electric power in the real income of Armenian households remained at 5%, because amid the irregular revision of tariffs, the 50% growth in income was compensated for by commensurable rise in specific consumption (from 37 to 53 kWh per person per month).