Georgia's deal with Inter RAO to lower electricity rates might be extended to 12 yrs
TBILISI. Jan 14 (Interfax) - The three-month memorandums that Georgia's government signed at the end of December 2012 with Russia's OJSC Inter RAO UES and Czech firm Energo-Pro to lower electricity rates for households until the end of March might be extended until 2025.
"We said earlier that a three-month period was determined as a result of negotiations by the transition memorandum without any conditions, which will be followed by long-term agreements to 2025, which will enshrine the reduction of rates," Deputy Energy and Natural Resources Minister Ilya Eloshvili told reporters on Saturday.
Commenting on an earlier report by Russian paper Kommersant that Inter RAO had proposed to Georgia to extend the current temporary mechanism for reducing electricity rates for an extended period, Eloshvili said this was "a continuation of the agreements reached by the parties."
He said rates will be reduced not at the expense of the investment obligations of Tbilisi power company Telasi, which is owned by Inter RAO, but at the expense of reinvestment that the company had planned given high rates and big profits.
"The advisability of these reinvestments is now being studied. Both sides have agreed that these reinvestments are not justified, they are very large, not needed by the grid in such an amount and, consequently, can be reduced," Eloshvili said.
He said the "main agreement has been reached, but three months were still taken for a start in order to see if there is a possibility of reducing the rate further in a way so that the company does not suffer."
Under the Georgian government's temporary memorandums with Inter RAO and Energo-Pro Georgia, electricity rates in the country will be lowered by GEL0.035 per kWh for consumers who use up to 300 kWh of electricity per month.
This category of consumers covers 90% of the customers of these companies. Rates will not change for customers who use more than 301 kWh per month.
Customers of Inter RAO's Telasi who use up to 100 kWh of electricity per month will pay GEL0.0994 per kWh (including VAT) and those who use up to 301 kWh will pay GEL0.1246, down from GEL0.1348 and GEL0.16 respectively. Customers of Energo-Pro (former United Electricity Distribution Company) who use up to 100 kWh of electricity per month will pay GEL0.0944 per kWh (including VAT) and those who use up to 301 kWh will pay GEL0.1298, down from GEL0.1298 and GEL0.1652 respectively.
Electricity rates for consumers in Tbilisi and the country's regions are differentiated depending on the amount of electricity used.
The official exchange for January 12 was GEL1.6582/$1.
