Russian supplier plans to hike power price

Russian giant Inter RAO EES plans to raise the price for electricity sold to Azerbaijan, an energy executive said.

“We have received a new proposal from the Russian side. We are scrutinizing it jointly with the government and will state our position on the matter by April 10,” vice-president of the state-owned energy producer Azerenergy, Marlen Asgarov, said.

RAO EES intends to raise the price for electric power by 30%. To offset the hike, it has offered for Azerbaijan to raise the price for electricity it delivers to the northern neighbor.

The Russian company and Azerenergy signed an agreement on energy exchange between the two countries on January 15, 2007. Under the contract, Azerbaijan purchased in Q1 200-250 MWt from the neighboring country for 3.636 cents per KWt/hr during the peak hours. The agreement was signed for one year, but the fees indicated in it were valid only for the first quarter. Under the changes approved on April 27, the price for electricity Azerbaijan imports from Russia increased although the volume of supplies remained unchanged.

The exchange of electric power between the two countries currently takes place only in case of dire need.*