The government has recently announced the resumption of energy billing through consumption bands being an alternative removed by Socialists after coming to power by referring to it as the ‘nest of rascals’. The government brings back this way of billing 7 years later, by arguing that we are dealing with an ‘energy crisis’. Every household currently paying 8 thousand ALL per month for energy, must prepare for a much more expensive bill. Energy Regulatory Authority data show 55 thousand to 65 thousand households to consume over 700 kilowatt/hours of energy per month.
“That’s why electricity bands were used in Albania. Turning it from a shield for the poor to a nestle of rascals. “By removing the electricity band, all have now come to light.” – said Prime Minister Edi Rama in January 2015, a month after abolishing the electricity billing through two bands.
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However, 7 years later, the “nest of rascals’ fell.
“The Ministry of Energy is now conducting a study for rich families aiming to check if a temporary allocation is possible based on who have more, should pay more on the energy bill,” said Prime Minister Edi Rama at his speech in the 31st of March parliamentary session.
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Prime Minister further reinforced the idea brought into the parliament during the preparations of the Socialist Party congress, when he said that the energy crisis dictates the need of distributing the burden as much as possible.
“We will set another price for all those who consume electricity much more than the general public, because they are richer,” – said Rama during the SP Congress on 9 April.
A few days later, the Minister of Infrastructure and Energy Mrs. Belinda Balluku, took care to clarify the media on these statements, emphasizing that Prime Minister was referring to families consuming larger amounts of energy, which may not necessarily be ‘rich’.
“They maybe are not richer, but they have a great need; however, we are at the end of an in-depth analysis showing which electricity band, how many kilowatts/hours a family needs to have a normal consumption.” – said Balluku after the government meeting on 13 April.
How many kilowatt/hours of energy does a family need for normal consumption?
“Approximately 700 kilowatts/hour is considered a normal consumption for a family with an average of 4 or 5 members. “Everyone consuming over such electricity band, which has not been approved yet, will pay a higher price” – said Minister Belinda Balluku.
Thus, if the government approves the electricity band, every household currently paying a bill of 8000 ALL for electricity (including VAT) will have an expensive electricity bill, as every kilowatt over 700 will be billed more expensive than the actual price of 9.5 ALL.
More specifically, referring to the data provided for Faktoje, households averagely consuming over 700 kilowatt/hours of energy are estimated to be 55 thousand to 65 thousand.
Meanwhile, referring to the 2021 annual report of the Energy Regulatory Authority, household consumers consist of 86.17% of the total number of USP consumers out of which only 5% will be affected by the price increase.
Also, the annual reports of the Energy Regulatory Authority over the years showed that the average monthly number of household consumers consuming more than 500 kilowatt/hour of energy varies from 55,000 to 65,027.
Even the former Deputy Minister of Energy and Former Director of APC, Mr. Gjergj Bojaxhi says for Faktoje that this is a unilateral initiative.
“The government cannot reflect market prices and costs only to the citizen without considering and reflecting mismanagement, corruption, nepotism to public companies providing such service. It is trying to focus the attention on a segment of the problem that is more than legitimate as a problem, however it is not legitimate to take a unilateral approach to this, where only the citizen has to face the higher costs while the leaders of public companies have in fact failed miserably. Furthermore, no action is taken against them and there is no reflection. To put it more simply, if Albania had as much losses as Montenegro, Albania in a normal year would not need to import at all. “I’m not saying the losses should disappear, but they should be as many as the neighbouring countries and we would not need to see these staggering price increases currently in question.”
On the other hand, the energy expert, Mr. Lorenc Gordani told Faktoje that the government should undertake a complete tariff reform.
“In fact, what needs to be done is the completion of the action plan regarding the strategy on opening the energy sector, where among its 17 points, the complete tariff reform is also included. But apparently, the government seems to be afraid of the fact of not having the financial means to support a wide needy category who will have to be reimbursed from the state budget due to the unaffordable increase of energy price in this period in the international markets. Moreover, there are no alternatives for these consumers… because the reform is not being completed.” – stated Gordani for Faktoje.
Meanwhile, the former legal director of the Energy Regulatory Authority, Mr. Eduard Elezi, expresses the concern of violating the independence of this institution.
“Minister’s statements are illegal because companies must apply. The price has another form of how the electricity tariff comes out; these present it to the Energy Regulatory Authority, which is an independent institution. The companies apply to the ERA to get the energy tariff. The application is then administered by ERA and the government is hereby consulted. How many social programs have you set up for this position? How much is the budget; after the budget has been approved. In emergencies you can review the price; however, the review is done when you have an emergency or in case the profits of the companies are big and the prices have dropped to the maximum. In this case, you can review the prices, but not increase it,” – said Elezi for Faktoje.
The Energy Regulatory Authority does not yet have concrete proposals from companies, as the initiative is under study. In 2014, when the Energy Regulatory Entity decided for the unification of the electricity price at 9.5 ALL, it removed the electricity bands arguing of increasing the abuse.
“Two-block tariff application had increased the company’s abuse leading to a larger number of complaints from households about electricity bills and meanwhile has had a significant impact on increasing the level of non-technical losses of the company.” – said the ERA Chairman Mr. Petrit Ahmeti in December 2014.
Meanwhile, the President of ERA, Mr, Petrit Ahmeti sees the current proposal of the government differently from 2014. Ahmeti told Faktoje that he does not think that setting a 700 kilowatt/hour electricity band will create billing abuses.
“The current price structure is not the same as it was then. And, even the consequences are not the same as they used to be. It is hard to say so, because I think that those who pay regularly are not believed to have such elements. We are talking about consumers who can be called “rich”, whom I do not believe need to do machinations to gain some energy. This remains to be seen; it is a proposal which is undoubtedly subject to discussion. “ – he stated.
The government’s initiative to raise the price for households consuming over 700 kilowatt-hours per month is seen more by the Head of the Regulatory Authority as an initiative of limiting energy use.
“It is a consumption level where families can meet all their needs and it turns out that only a small part of families consume over 700 kilowatt/hour, but such families are not of those who suffer to pay. This mechanism is simply to limit the use of electricity under such conditions where, on the one hand, we have the fixed price and on the other hand it is good to economize and not just to limit the use of electricity”- said Ahmeti.
The Power Distribution Operator bills 1 million 270 thousand customers. According to OSHEE, meter reading is currently done every month, unlike a year ago where pursuant to ERA’s decision, the billing was done once in two months. With the electricity band resumption on the invoice, OSHEE is obliged to read the meters every month and on the same dates. Therefore, the implementation of the initiative raising big questions still remains to be seen…