NERC raises electricity tariffs for high consumption households

The National Electricity Regulatory Commission voted yesterday to increase electricity tariffs by 30% for high consumption households (over 150 kWh/month). The tariffs for low consumption households will remain the same (UAH 0.204 per kWh vs. UAH 0.702 for commercial customers).  Yegor Samusenko: We see this increase as modest, as market was flooded with rumors of a twofold hike. The 30% increase will affect no more than 10% of electricity volumes sold in Ukraine, according to our estimates, and lead to an increase in total revenues from electricity sales by 1.2%. That means the state decided to keep households tariffs at low levels, while commercial customers are paying for the fuel price growth. The decision to postpone a larger scale household electricity tariff increase is likely related to the government’s decision to raise other utility tariffs in 1H11, heating and natural gas. In 2011, we expect 15% average electricity price growth, driven mostly by an increase in commercial tariffs.