Kyrgyz authorities propose to include all costs of energy companies in electricity tariffs
The Ministry of Energy of Kyrgyzstan has proposed a new methodology for calculating electricity tariffs, according to which consumers will be required to pay depreciation for energy companies and ensure the profitability of enterprises in the industry. The relevant order has been submitted for public discussion.
As noted in the ministryt, the new methodology will take into account all the costs of electricity generation in the tariff, which is in line with the international financial reporting standard.
“The calculation provides a full accounting of all costs for the production and transmission of electricity to the consumer, and also serves as one of the criteria for the rational allocation of both energy capacities and large consumers of electricity. At the same time, the project proposes to include depreciation and profitability in the tariff, which are currently not included in the tariff,” the statement of justification for the innovations says.
The Ministry of Energy explained the need for changes by saying that at the moment, industry enterprises cannot cover the costs for uninterrupted power supply to the population. Obviously, the time has come to invest additional funds in the industry, in particular, for the reconstruction of power grid equipment.
“This is necessary to ensure an acceptable level of service at the present time and the development of the power supply system in the future. In turn, the source of financial investments are electricity tariffs,” the ministry concluded.
In Kyrgyzstan, from May 1, 2023, the price of electricity for the population increased by 30% and reached 1 som ($0.011) per kWh. If the limit of electricity consumption, which is 700 kWh, is exceeded, the tariff will be calculated at 2.16 soms ($0.025) per kWh.
The government emphasized that changing the tariff policy is a necessary measure: it is "necessary to ensure the country's energy security, uninterrupted power supply to the population in the context of a dynamic growth in consumption."
At the beginning of this year, President of Kyrgyzstan Sadyr Japarov said that the cost of 1 kWh of electricity is 2.38 soms ($0.027), and the debt of industry enterprises reached 137 billion soms ($1.6 billion). The difference between the cost price and the current tariff for the population "is imposed as a burden on the existing debt," the head of the country explained.