Publication: Republic of Armenia : Power Sector Tariff Study
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Date
2013-06
ISSN
Published
2013-06
Author(s)
Kochnakyan, Artur
Balabanyan, Ani
Laderchi, Caterina Ruggeri
Olivier, Anne
Pierce, Lauren
Hankinson, Denzel
Editor(s)
Abstract
Armenia's energy sector has achieved a level of electricity reliability, service quality and efficiency of sector operations that stands out among countries participating in Commonwealth of Independent States (CIS). Much of this can be attributed to a decade of regulatory reform including a long-standing commitment to cost-recovery tariffs. The study is structured as follows: section one provides definitions of the key terms used and a background on the current tariff setting process in Armenia. Section two indicates how far tariffs have departed from cost-recovery levels and what costs have not been covered as a result. Section three describes how new investments will affect the average cost of service and the average residential tariff. Section four proposes a marginal cost-based tariff structure and explains why this differs from the current tariff structure. Section five discusses the poverty and social impact of tariff increases needed to cover new investments in 2021. Section six identifies options for subsidization and mitigating rate shock that will help transition to higher, marginal cost-based tariffs. Finally, section seven summarizes conclusions and recommendations of the analysis.
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“Kochnakyan, Artur; Balabanyan, Ani; Antmann, Pedro; Laderchi, Caterina Ruggeri; Olivier, Anne; Pierce, Lauren; Hankinson, Denzel. 2013. Republic of Armenia : Power Sector Tariff Study. © World Bank. http://hdl.handle.net/10986/16703 License: CC BY 3.0 IGO.”
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