AYFB: It’s Unclear why ESCO Abstains to Publish Differentiated Tariffs of Imported Electricity

“I doubt that ESCO has been involved in questionable deals”, Giorgi Kapanadze, head of the Association of Young Financiers and Businessmen (AYFB) noted.

ESCO stubbornly continues publishing only the average weighted tariffs of electricity imports and abstains to publish the daytime, weekend, and night tariffs of imported electricity. The Commersant introduces an interview with AYFB director Giorgi Kapanadze.

-In 2018, Inter RAO established its affiliated company in Georgia. Since then, electricity imports from Russian Federation have been growing, based on considerations that Russian electricity is cheaper compared to other suppliers.

Do you agree with this consideration?

-I would discuss this problem from another side – uncertainty and problem, first of all, are created by the incompleteness of documents and information published by ESCO. The matter is that ESCO-published information does not illustrate the full picture of electricity imports and therefore, these indicators do not enable to make a valuable analysis. Therefore, it is impossible to provide a clear response to your question about whether Russian electricity import is cheaper compared to other suppliers.

Your organization AYFB has applied to ESCO to forward the differentiated tariffs of electricity imports over the past few years. Do you think ESCO will send you this information?

-Regretfully, I am less optimistic in this regard. The legal timeframes for forwarding the requested information will expire in 2 days. My skepticism grows because only several hours are required to collect and forward this information to AYFB. The fact is that ESCO maximally delays the response. ESCO refuses to discuss openly these issues with media agencies, referring to ungrounded reasons.

In the decision-making process, ESCO is based on daytime, night, and weekend imports tariffs, that is, contractual prices, and therefore, it is unclear why it abstains to publicize the information on the taken decisions in the same format. The fact is that ESCO-published average weighted tariffs do not enable to provide valuable analysis, whether electricity import is carried out impartially and properly in Georgia. Naturally, we have legal doubts that ESCO may be in questionable deals.

Do you think the country should refuse Russian electricity imports because of political reasons even if the Russian electricity import is cheaper?

- Georgia should import electricity from those suppliers that provide the best conditions in this or that specific period. In the decision-making process, Georgia should also take into consideration seasonal factors (avalanche hazards and so on), transmission line capacities and their shutdown risks, availability of parallel regimes, and many other details. The country should also take into consideration the price that consists of the daytime, weekend, and night tariffs and that is the contractual price. ESCO does not divulge these very prices for unclear reasons. As for the cheapness of Russian electricity, for example, in January 2021, Russian electricity imports were cheaper - Cent 4.1/4.1/7.8 amid holidays, while in the same period Azerbaijani electricity imports cost Cent 3.9/3.9/5.4. ESCO bought Russian electricity amid the January holidays When the daytime tariff totaled Cent 7.8, we bought the electricity from Azerbaijan for Cent 4.4/4.4/4.4. In February, the Russian electricity tariff was Cent 3.5/3.7. 7.8.

This signifies that ESCO has taken the correct decision in this case when it imported electricity from Azerbaijan. Therefore, it is unclear why ESCO does not unveil differentiated tariffs. In reality, these tariffs cannot be hidden and they must not be hidden. Amid such approaches by ESCO, analysts, including AYFB energy policy analytical group perceives the real picture belatedly, and naturally, if we see that ESCO has taken detrimental and inappropriate decisions, we will give a due reaction.

What do you imply in the due reaction?

- At this stage we plan to explain the absurdity of this situation in our open letter to the Prime Minister because ESCO ignores our lawful request and therefore, we will ask the Prime Minister to provide an adequate decision.