Regulator Rejects Water Rate Hike in Tbilisi

The Energy and Water Regulatory Commission said after a meeting on May 18 that it rejected a request by the water supply company in Tbilisi to increase the tariff.

Georgian Water and Power, which supplies water to about 413,000 households and 16,200 commercial entities in the capital city, filed a request to the regulator for a rate hike in January.

The company sought an increase of the rate for households by about 55 tetri, from the current GEL 3.1471 per family member to GEL 3.7 per month.

Georgian Water and Power also wanted a rate increase for households that have individual meters, from the current rate of GEL 0.2655 to GEL 0.3186 per cubic meter of consumed water.

The rate for commercial entities also remained unchanged – GEL 4.4 per cubic meter.

The Energy and Water Regulatory Commission said it does not expect a new review of tariffs until the end of 2016.

Georgian Water and Power said in a written statement on May 19 that refusal to increase tariff violates purchase and sale agreement, which was signed with the government. The state-owned water utility company was privatized in 2007. Georgian Water and Power said that the agreement envisaged review of tariff by 2015.
 
It also said that the regulator’s decision “hinders” its plans for initial public offering and puts Georgia’s investment climate in “a negative light.”

In the statement the company does not say whether it will appeal the decision to the court; instead it calls on the government to voice its position over regulatory commission’s decision. 

Existing water rates are in force since December 2010, when tariff increased by over 31%.

Energy and Water Regulatory Commission is now in the process of considering a request from Energo-Pro Georgia, an electricity distributor company, which seeks increase of electricity tariff.

Depreciation of the Georgian currency lari, which has lost about 32% of its value against U.S. dollar in the last six months, is cited as one of the reasons behind the company’s request to increase tariff.

Energy Minister Kakha Kaladze said last week that the government will consider the possibility of “targeted subsidizing” if the electricity tariff is increased.