26 07 2007 (AT) Tirana_ Amidst a severe energy crisis, the Albanian Power Corporation, KESH, announced Wednesday it will request an electricity price hike to recover from the higher cost of imports and low hydropower production due to the country’s drought.
The national electric company said it is preparing a new price list for various types of consumers and soon will send a renewed application to the Energy Regulatory Agency for approval.
“We are preparing our request for the regulatory agency and it is this institution that will decide if we will have a price hike,” company director Gjergj Bojaxhi said.
KESH has struggled lately to supply its customers as its limited imports and lower production has caused massive power cuts across the country. Most of Albania’s power generation comes from hydropower plants, which are susceptible to the weather. The increased use of air conditioners because of record temperatures this summer also has meant a higher demand for electricity.
Bojaxhi did not elaborate how large the price hike will be, but he admitted the company’s finances were in shambles.
“We are still making our analysis for the price and will have a clear idea. The corporation is in financial difficulty. However, if we move forward and improve our collection rates, then the company should be fine,” Bojaxhi said.
Energy theft is common in Albania. The improvement of its collection rates has become one of the prerequisites for the company to have the continued support of international creditors like the World Bank.
That support is critical because according to the National Energy Strategy, the company will need $1.6 billion in investments to ultimately eliminate power cuts, which are taking a toll on the economy. Power shortages last year cost Albania 1 percentage of its GDP growth. according to the Finance Ministry.
Since Bojaxhi became director in February, the company has made a huge effort to improve its collections. It has cut illegal power lines and left customers who refuse to pay without electricity, however bill collections remain a problem. (BIRN)
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