Albania hikes electricity prices to help power company pay debts

TIRANA, Dec 26 (Reuters) – Albania's power regulator ERE raised the price of electricity for businesses and scrapped its cheaper rate for households on Friday to help companies in the sector pay off debt to meet criteria set by international lenders.

The World Bank lent Albania $150 million in September for power sector reform and the government aims to return it to profitability in 2017.

Retail distributor OSHEE needs to bring its debt down to 22 percent in 2015 of total electricity billed from 48 percent this year, a level reached due to abuse of the two-tier price system, unpaid bills and an obsolescent distribution network.

ERE chairman Petrit Ahmeti said businesses using 35 kV electricity will start paying 9.5 lek per kWh from 8.5 lek per kWh throughout 2015, the price they used to pay at peak hours.

Industrial, agriculture, trade and service businesses using 20, 10 and 6 kV electricity will be paying 11 lek per kWh. They had paid between 8.7 lek per kWh and 10 lek per kWh.

Businesses using 0.4 kV electricity will be paying 14 lek per kWh, while bakeries 7.5 lek per kWh, Ahmeti said.

 

Households, which had been paying according to consumption, will pay a single price of 9.5 lek per kWh, he said.

Those consuming less than 300 kWh of electricity paid 7.7 lek per kWh and 13.5 lek per kWh for electricity above that.

ERE authorised the KESH electricity producer to raise its price to 1.45 lek per kWh from 1 lek per kWh, but did not change the price for the electricity transmitter monopoly OST from 0.65 lek per kWh.

OSHEE, KESH and OST are all state monopolies.

(Reporting by Benet Koleka; Editing by Louise Ireland)

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