ENA CJSC intends to cut losses to 9% within several upcoming years

ArmInfo. Electric Networks of Armenia CJSC (ENA) intends to cut losses to 9% within several upcoming years, Director General of the Company Karen Harutyunyan told journalists on September 14.

According to him as of Jan-Aug 2016 losses of ENA totaled around 10%.  "Of course, this figure will slightly grow by the end of the year, as in Nov-Dec the company will inevitably have technological losses.  However, the company will manage to keep the indicator set by the Public Service Regulatory Commission and possibly will even have lower level of losses by the end of the year", the CEO noted recalling that earlier the regulator set normative standard of losses at the level of 11.02%.

Harutyunyan added that by introducing ASKO system expenses on salaries will reduce as there will be no need in electricians.  Operators in the client service centers will replace them. Due to introduction of state- of-the-art technologies the number of the company's employees has been cut to 7100 versus 8 thousand people. At the same time according to social policy of the company those employees, who were dismissed, are transferred to other branches of the company or are provided with the right for adaptation till October 1 in order to find another job. Job cuts will continue.  Currently measures are taken for reducing losses and raising the quality of subscribers' service, which finally will lead to reduction of tariff margin.

The Director stressed that ENA will never be an initiator of raising tariffs. "Our investment program is aimed at exclusion of additional burden for subscribers", Harutyunyan stressed recalling that the program amounted to 100 bln drams to be implemented till 2020 is aimed at cutting tariffs and losses. At the same time neither investments nor the upcoming suspension of Armenian NPP for regularly scheduled maintenance will have any impact on the final tariff for subscribers. "Our investment program has been developed considering these circumstances", the Director noted recalling that the regulator has the exclusive right to confirm new tariffs. "In any case every effort is exerted not to allow growth of tariffs", Harutyunyan noted.  41.4 bln drams out of total investments of 100 bln drams will be directed on repair of electric substations and replacing the main equipment. "The matter concerns unprecedented investments after making which the situation will improve. But even after this the network system will still be far from being ideal. In this light negotiations are being held with international companies-producers of power equipment for attracting property on beneficial terms, which will allow to speed up the process of network modernization", the Director General of the company said.

He also pointed at the fact that the project implementation will help to reduce the terms for subscription of new clients. In Jan-Aug 2014 2300 subscriptions were registered, in 2015-1940 and in 2016 this indicator has already totaled 3100. In accordance with the program significant part of the activities will be held in the center of Yerevan, which will be ensured with additional capacities creating conditions for further development of the capital.

Talking about the debts the CEO informed that debts of Nairit plant (1.4 bln drams) and Vanadzor Khimprom (1.3 bln drams) hold 90% share in overdue debts portfolio.

He also rejected information about possibility of purchasing Karabakh electric networks by the company.  "The company does not intend to purchase electric networks of Nagorno Karabakh. This information does not correspond to reality", Harutyunyan noted.

To recall, on May 4, the Public Services Regulatory Commission (PSRC) approved the investment program of the Electric Networks of Armenia for 2016. The total cost of the program will be 19,895 bln AMD, with 2,496 bln AMD of this amount to be spent on reduction of blackouts, ensuring of safety, replacement of out-of-date equipment. In addition, 301,41 mln AMD will be spent on reduction of average duration of voltage deviations. Some 6,127 mln AMD will be spent on connection of new consumers to the network, 8.649 mln AMD on improvement of the revenue metering system, 1,309 bln AMD on acquisition of machinery and mechanisms, and 1,010 bln AMD on other expenses connected with operation of the electric networks.

To note, this is the first investment project of the company since Tashir Group has purchased it. On 30 Sept 2015, Tashir Group headed by Russian businessman of Armenian origin Samvel Karapetyan and Inter RAO signed an agreement of purchase and sale of electric power assets of the Russian energy holding in Armenia - ENA CJSC and Hrazdan TPP.  The reason of the sale was the public discontent about the ungrounded growth in electricity prices by approximately 16.7% (6.93 AMD per 1 kWh). The Public Services Regulatory Commission's (PSRC) decision to raise the tariff sparked protests and the Armenian authorities agreed to audit both the expediency of PSRC's decision to raise the tariff and the activities of the Electric Networks. In addition, the authorities and Tashir Group took a decision to subsidize on a parity basis the raised tariff for the households and SMEs until the audit is completed.