Kazakh government takes measures to reduce utility costs

ASTANA – Utility costs will be reduced in all regions beginning Jan. 1, said Vice Minister of National Economy Serik Zhumangarin at a Dec. 20 press conference in the capital.

The action comes in response to a task set by President Nursultan Nazarbayev at the Security Council meeting to reduce costs and enhance tariff setting transparency.

Heat service costs have already been reduced by 36.8 percent in the Akmola region, 2.8 percent in the East Kazakhstan region and 1.1 percent in the North Kazakhstan region.

Costs will be cut by 15.3 percent in the Turkestan region and 2.2 percent in the Karaganda region, resulting in an approximately six billion tenge (US$16 million) public fund savings for heat supply services.

Serik Zhumangarin

“We expect cost reductions in water supply, water disposal, power supply, heat supply and gas supply,” said Zhumangarin.

Work has been coordinated in the regions since Nov. 12 to establish feedback from citizens, resulting in 102 meetings on problematic housing and utilities issues attended by 2,791 residents. The Atameken National Chamber of Entrepreneurs, reporters, local executive bodies, the Nur Otan party and public associations also took part in the events. Hotlines were organised for consumers who did not have the opportunity to attend the public events.

“Based on appeals and complaints, 55 unscheduled inspections were conducted and 15 inspections are scheduled,” he added.

Water supply and wastewater service savings will be more than 2 billion tenge (US$5 million). Price reductions in gas supply are forecast to improve from 3.3 to 17.5 percent and savings for gas supply services will be approximately five billion tenge (US$13 million).

The ministry also completed work to reduce electricity transmission tariffs. KEGOC, the nation’s electricity grid company, intended to increase costs by 12 percent through interregional level networks as part of the five-year maximum tariff approved in 2015. The regulation of natural monopolies and protection of competition committee decided to keep the figure at the current level of 2.4 tenge (US$.01) per kilowatt per hour.

“The Ministry of Energy published information on price reductions at the stations the day before. Now, it became possible to reduce prices for power supply services. The share of stations in retail electricity prices has reached 60 percent,” said Zhumangarin.

Retail electricity prices for entities in eight regions are expected to decline from 1.7 to 18 percent. Savings for electricity services will be more than 14.5 billion tenge (US$39 million).

“The price reduction will eventually lead to a decrease in the average bill for utility payments per month,” he added.

According to the decision approved by the Ministry of Energy, the electricity price ceiling will not change until 2025.