Electricity Tariffs For Households Will Grow In 2006.

Yesterday the Cabinet approved a decision by the NERC to increase residential electricity tariffs by 20% in 1Q06. The NERC is going to increase the residential electricity tariff by 10% in subsequent quarters, until the tariff covers the costs of supplying electricity to households. Concorde Capital: Electricity tariffs for households were last changed in 1999, and currently they are even lower than in Russia. Residential tariffs cover less than 50% of the costs related to electricity production and supply, and the costs are cross-subsidized by industrial consumers. Thus, residential tariff growth will decrease the cross-subsidization burden of industrial electricity consumers, creating better conditions for the development of Ukrainian economy.