Government • 13 November, 2018

Final prices for commercial gas to be reduced by 6-15% from January 1 — Bozumbayev on execution of Presidential orders

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The work of the Government meeting began with a consideration of the implementation of the instructions given by the Head of State at a recent meeting of the Security Council. Minister of Energy Kanat Bozumbayev reported that from Jan. 1, 2019, a new tariff methodology will be applied for the electricity generation sector, informs primeminister.kz.

“The orders of the Head of State, given at the Security Council Nov.7, 2018, will be executed by the Ministry of Energy,” reported Bozumbayev.

In accordance with the instructions of the Head of State, objective marginal tariffs for electric energy will be set for energy producing organizations.

“With the introduction of the electric power market since Jan. 1, 2019, a new tariff methodology will be applied to the electric power generation sector,” said Bozumbayev.

Thus, the cost of electricity from energy producing organizations will be divided into the tariff for power and tariff for electricity. The ministry will reduce electricity prices taking into account the sum of the two components for power plants (the cost of electricity and the cost of power).

“Today, joint work has been completed with the General Prosecutor’s Office on inspections of main power plants. The Ministry of Energy approved the schedule and started hearing all energy producing organizations. We will complete this work by Nov. 20 and the corresponding order must be adopted before the end of this month,” the minister said.

The establishment of an objective level of marginal tariffs for electricity will provide an opportunity to reduce selling prices for energy producing organizations. The level of decline will be different for different power plants.

The minister reported that based on changes in selling prices of energy producing organizations, the authorized body exercising leadership in the areas of natural monopolies would have to take measures to reduce the cost of electricity for final consumers.

In addition, in order to reduce electricity tariffs for energy-producing organizations, the Ministry of Energy has developed a draft order, which provides for the reduction of marginal wholesale prices for marketable gas.

“According to our estimates, the decrease in wholesale prices will reduce the final prices of commercial gas from Jan. 1, 2019, for power plants using gas by 6–15%, depending on the region. Approval of the Order is planned at the end of November 2018,” the minister said.

The Committee on the Regulation of Natural Monopolies will need to adopt appropriate orders to reduce the prices of gas for power plants on the basis of the wholesale gas prices reduction conducted by the Ministry of Energy.

Measures to reduce the price for electricity and marketable gas will be implemented in the form of approval of the relevant Ministry Order of the until the end of November 2018. The aforementioned Order comes into effect Jan. 1, 2019.

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