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Government to Determine New Players of Free Market of Electricity

According to the new draft law, the Government will define which other players will be able to buy electricity on the free market, Irina Milorava, head of the Georgia National Energy and Water Supply Regulatory Commission (GNERC), noted.

Irina Milorava told BM.GE that it is not known when major players will appear on the market, because this depends on when the Government will submit the bill to the Parliament.

„Government of Georgia will determine the criteria for acting on the free market. This is a final bill. Similar approaches are absolutely acceptable, when the Government determines the stages of market openness. Naturally, initially, major consumer companies will be involved, which consume about 10 million kw/h electricity a month. At the next stage, all consumers will be admitted to the free market», Irina Milorava said.

The current electricity tariffs were calculated for the period of 2018-2020. BM.Ge has inquired how the tariffs may change if entrance of major players will not be continued up to the end of 2018.

“Naturally, these changes will affect consumer tariffs, because in 2017 we calculated the tariff in a different situation – we expected major players to act on the market. Therefore, absolutely different basket was determined for the distribution companies. What will happen with the tariff? The methodology gives direct answer to this aspect. The company revenues should change in the way, whet it acquires the authority to apply to the regulatory commission, for example, in this specific case, major players have not appeared on the market, but, in exchange, hydrology was improved and much more hydro resources were generated compared to the initial plan.

Therefore, we are waiting that the companies apply to the commission if they substantiate that changes are essential”, GNERC chairman noted.

We remind you that starting May 1, 2018 the three major electricity players buy electricity under the free market principle. The companies that have consumed 15 million kw/h electricity in January-March 2018 have entered the market.