Differential tariffs for electricity in Kazakhstan: there is a right, but there's no way
Representatives of all regions, government agencies, and business entities discussed the issues of returning differential tariffs for electricity during the times of low and high energy consumption and ensuring transparency of tariff at the Tariff Council of the Atameken NCE RK.
A hot discussion was held on the issue of abolishing the differential tariffs by the off-peak and high peak electricity consumption hours. Zhetpisbai Yedigenov, Director General of Almaty Heavy Machine Building Plant JSC, expressed his position on the usage of these types of tariffs.
"There should be several options for consumers of electricity, as it affects the economy of production, in particular, our production activities. Cancellation of night-time tariffs has affected the cost of production by about 10-12%," Zhetpisbai Yedigenov said.
In turn, Deputy Director-General of Kazakhstan Communal Systems LLP Vladimir Usenko noted that currently, all energy-producing organizations sell electricity at the marginal tariffs approved at the cost level, with zero profit.
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"We do not see any opportunity for differential tariffs in the current market structure," Vladimir Usenko said.
According to the President of the Transparent Tariff Association Pyotr Svoik, the tariff should be returned. Moreover, it can be reduced by 50% for consumers.
"It is necessary to change the very design of the energy market, as provided in the 50 and 52 steps of the Plan of the Nation. It is necessary to propose to the Ministry of Energy to implement these steps.
"The Night Tariff can be made profitable for both power plants and consumers at a rate of half the average cost," Pyotr Svoik said.
In turn, Yuliya Yakupbayeva, Deputy Chairman of the Board of the Atameken NCE RK, reminded that the purpose of introducing differentiated tariffs by off-peak and high peak hours was to stimulate the flattening the load curve.
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"Initially, the difference between night, day and evening tariffs was significant. At the same time, a number of companies have rebuilt their business processes to work at night. After the abolishment of differential tariffs, these consumers began to incur significant costs. Today, the night tariff was abolished, but the right to use it is available. And there is no possibility because energy-producing companies say they cannot provide such an opportunity for business," Yuliya Yakupbayeva stressed.
The discussion on this issue will continue after the relevant calculations. Also, the issue of differentiation by consumer groups was considered, in which cross-subsidization of tariffs for households by legal entities takes place. Dina Galimetdenova, Director General of Batys Energoresursy LLP, proposed to consider the possibility of applying differentiated tariffs for electricity transportation by consumer groups.
The participants of the meeting of the Council raised the issue of the need to reduce the difference between differentiated tariffs for individuals and legal entities. Thus, a member of the Council Andrey Vitik noted that in Almaty there is experience in applying a single tariff on electricity for all consumer groups.
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In addition, the issues of introduction of the power and electricity market, the introduction of green technologies, the introduction of unified tariffs for natural monopolies’ services, mandatory sale of all generated energy at the centralized auction, which were discussed in detail at the next meeting of the Council.
Meruert Kazbekova, a member of the Mazhilis of the Parliament of the Republic of Kazakhstan, noted the importance of the issues discussed at the Council.
"All issues related to tariff setting, including tariff differentiation, development of competition in the electricity market, tariff revision require mandatory discussion by all stakeholders, as well as the general public," the deputy said.
Following the results of the Council, the representatives of the Atameken NCE RK, business community and Committee on Regulation of Natural Monopolies of the Ministry of National Economy of the Republic of Kazakhstan made a decision to carry out work on:
1) calculations and analysis of tariff levels:
- when switching to the mechanism of differentiation of tariffs at low-peak and high peak hours;
- differentiation of electricity transmission tariffs by consumer groups;
2) determination of forecast tariff indices for a five-year period by natural monopolies;
3) development of joint approaches to digitalization and monitoring of infrastructure and activities of natural monopolies and entities of socially significant markets.
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