2013年-世界发展银行全球_Republic_of_Armenia___Power_Sector_Tariff_Study_140页_2mb

Republic of Armenia: Power Sector Tariff Study Summary

Core Content

This report evaluates the current tariff structure in Armenia's power sector and proposes a transition to a marginal cost-based system to improve efficiency and financial sustainability. It outlines the challenges of maintaining affordability while covering rising costs and highlights the need for significant investments in infrastructure and generation capacity.

Main Objectives

• Analyze the current tariff structure and its deviation from cost-recovery levels
• Assess the impact of new investments on the cost of service and tariffs
• Propose a marginal cost-based tariff structure
• Identify options for mitigating the social impact of higher tariffs
• Recommend transition mechanisms to support the shift to a more efficient system

Key Findings

1. Current Tariff Structure

• The current tariff structure does not reflect marginal costs and leads to inefficient consumption patterns.
• Residential tariffs are approximately 13% below the efficient cost of service due to government interventions such as waiving depreciation and profit for state-owned companies, and not adjusting for inflation.
• The lack of a clear methodology for class revenue allocation and tariff structure has led to cross-subsidization between customer classes, particularly from non-residential to residential users.

2. Rising Costs and Investment Needs

• The cost of electricity service has increased due to higher natural gas prices, inflation, and reduced consumption.
• Armenia needs a new 1,100 MW nuclear plant by 2021 to replace the ANPP and two aging gas-fired TPPs.
• Significant investments are also required for the rehabilitation of transmission and distribution networks.
• The revenue requirement for the sector is expected to increase from around 60% of total sector revenue in 2012 to 75–90% in 2021.

3. Proposed Marginal Cost-Based Tariff Structure

• A marginal cost-based tariff structure would include seasonal and fixed components to better reflect actual costs.
• It would improve revenue allocation to remove cross-subsidies and promote energy efficiency.
• The proposed tariff structure is as follows:

4. Impact of Higher Tariffs

• Large tariff increases (70–270%) are necessary to finance new investments.
• These increases could result in a 1–8% increase in poverty levels and a 2–5% increase in electricity poverty, disproportionately affecting the poorest households.
• The Poverty Family Benefit Program (PFBP) is insufficient to protect beneficiaries from these impacts.

5. Transition Mechanisms

• The PSRC can use mechanisms such as Construction Work in Progress (CWIP) or regulatory assets to smooth the increase in revenue requirements over time.
• Transition mechanisms should preserve some price signals while reducing the burden on specific customer classes.
• A transitional subsidy may be necessary in the short term to prevent rate shock, though it is considered a last resort due to high fiscal costs.

6. Social Impact Mitigation Options

• Several subsidy options are available to mitigate the social impact of higher tariffs:
  • Voucher Program/Cash Transfer to All Poor Households: Highest coverage (98%), but with high fiscal costs (1.5–14.5 billion AMD).
  • Lifeline Tariffs - Increasing Block Tariff for All Customers: Moderate fiscal costs (12.3–75.7 billion AMD), high coverage (98%), and moderate targeting (88%).
  • Lifeline Tariffs - Volume Differentiated Tariff for All Customers: Moderate fiscal costs (2.7–60.8 billion AMD), moderate coverage (17–34%), and high targeting (82%).
  • Reduced Tariff for All Customers: Lowest targeting (10%), but highest coverage (99%).

Main Recommendations

• Transition to a marginal cost-based tariff structure to reflect true costs and improve efficiency.
• Implement social mitigation measures such as targeted subsidies, voucher programs, and lifeline tariffs to protect vulnerable populations.
• Strengthen the regulatory framework to ensure proper revenue allocation and tariff setting methodology.
• Use transition mechanisms like CWIP to avoid sudden rate shocks and support a gradual shift to new tariffs.

Conclusion

The report concludes that while Armenia has a strong regulatory track record in the power sector, the current tariff structure is suboptimal and needs reform to reflect marginal costs. A transition to a more efficient system is essential for long-term financial sustainability, but must be accompanied by social support mechanisms to ensure affordability for all consumers, especially the poor.