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What will have a positive effect on the tariffs of natural gas sold to consumers? project. "Fact"

"Fact" daily writes:

The Public Services Regulatory Commission proposes to make changes to its own 2023. in the decision N 32-Н of February 1.

With the method of calculating regulated tariffs in the gas supply system approved by that decision, a stimulating tariff policy was planned for the companies of the gas supply system, with the aim of ensuring the necessary investments in the system and optimization of operation and maintenance costs.

According to the methodology, starting from 2020, a 10-year period is fixed for gas supply system companies, which is divided into 2 five-year periods.

During the five-year period, the operation and maintenance costs of the company are not revised annually (only the material and repair costs are subjected to a slight adjustment), the allowable amount of losses, which must be improved at the end of each period, at least reaching the set target indicators.

This approach is an opportunity for companies to achieve cost optimization and loss reduction as quickly as possible during the period of incentive regulation, while receiving additional benefits, and the tariffs of the year following the end of the regulation period will already take into account the improved indicators, having a positive effect on the tariffs of natural gas sold to consumers.

According to the commission, material costs are a significant part of the cost item "Repair and material costs" of operation and maintenance costs.

"Gazprom Armenia" carries out repair work in the gas supply system both within the framework of current operation and maintenance costs and investment projects, in the latter case receiving their compensation through the inclusion of depreciation and profit in the tariffs.

Therefore, sub-paragraph 4 of point 13 of the methodology stipulates that the repair and material costs provided for in the tariff calculations are subject to mandatory implementation in the amount of 90 percent (taking into account the savings planned at the end of the 1st five-year period), which in case of failure to provide the amounts received and not spent by the tariff according to the methodology are considered as a source of investment financing.

As a result, a situation has arisen where the gas supply company, having the opportunity to reach the final target of cost reduction in a shorter period of time, does not have that incentive due to the mandatory 90 percent threshold.

At the same time, at the end of the 2nd five-year period of the stimulus regulation, the methodology stipulates a further 10 percent reduction in repair and material costs compared to the amount reduced by the results of the 1st five-year period, as a result of which the total reduction compared to the initial year will be 19 percent.

As a result, it became necessary to revise the mandatory minimum threshold of expenses provided for in the expenditure article "Repair and material expenses" and set it at 81% instead of 90%.

According to point 15 of the methodology, it was established that investments in the gas supply system in the 1st and 2nd five-year periods will amount to 195 billion drams, including up to 80 billion drams in the 1st five-year period.

However, based on the needs of the gas supply system, certain changes were made in the investment programs agreed with the commission, as a result of which more investments will be made in the 1st five-year period.

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