Ministry of Energy Considering Tariff Adjustment in Regions

Kazakhstan’s Ministry of Energy is considering the possibility of introducing a uniform energy tariff for all regions, director of the department of electric power Baurzhan Sarsenov announced.

The order was given by Kazakh President Nursultan Nazarbayev at the May 4 enlarged government meeting at the Akorda presidential palace. He gave specific instructions to substantially revise the policy in the electricity field, saying, “The industry is characterised by high wear and tear of equipment and infrastructure, which is exacerbated by a non-transparent tariff system. To address these issues, we will be implementing a single buyer model. Centralising purchasing power helps to mitigate the differences in rates between regions and control the pace of growth rates.”

“In the transition to a system of a single buyer,” said Sarsenov at a May 8 briefing of the Central Communication Service,“we will need to consider combining energy transmission and energy supply companies. So in the part that now goes to the tariffs of these organisations, we expect a reduction of tariffs.”

He noted, however, that establishing a common energy market in the Eurasian Economic Union (EAEU) barely affects consumers. “The principle of creating a common market suggests that it is necessary, first of all, to provide for its customers. The sale of surplus electricity will be implemented in the framework of this market. We plan to equalise the tariffs in the region as much as possible with the introduction of the single buyer model of electricity and power. I think we will come to equalising the tariffs to some extent. Moreover, this tariff will be lower than the one currently existing,” said Sarsenov. 

He also explained how the tariffs will be formed in the next year as the present programme of maximum tariffs,which has operated in Kazakhstan for the last five years, ends in 2015.

“The existing tariff will be divided into two parts. The first will be a constant tariff for electric capacity, which will enable us to attract new investment in the industry. The second part of the tariffs will be electricity consumption,” said Sarsenov.

He added that after the end of the current programme, the country will be entering the electric capacity market. The current maximum tariff rate is likely to continue, but “not in the form that it exists now,” promised Sarsenov. “And to curb the growth of tariffs it will be capped by the state.”

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