On February 17, the procedure for calculating and paying the additional sums arising from the sale of electricity generated at the expense of additional water intake from Lake Sevan in 2021 to the companies of the power system was established by the decision of the executive.
Reminder: 227,651 million cubic meters of water was taken from Lake Sevan, out of which additional water intake constituted 57.651 million cubic meters in 2021.
The additional funds generated as a result of the additional water intake will be transferred to the extra-budgetary account opened by Water Committee of RA Ministry of Territorial Administration and Infrastructure opened in Operational Department of RA Finance Ministry. With this money it is planned to modernize the irrigation systems. The funds will be provided by the end of the financial year 2022 by the decisions of RA Government.
International Energy Corporation CJSC, which operates Sevan-Hrazdan hydroelectric complex, has expressed its dissatisfaction with the project. The company noted, "In fact, the presented procedure does not envisage any compensation for possible additional costs (current repairs, material costs, etc.) resulting from the production of electricity due to the volume of more than 170 million cubic meters of water discharged from Lake Sevan, which would be a much fairer approach, on the contrary, the amount of additional profit tax simply generates new losses in the company.
It turns out that the production of electricity due to the volume of water released from Lake Sevan exceeds 170 million cubic meters is doubly harmful for the Company due to non-compensation of possible additional costs and profit tax on the other hand.
It should be noted that the price of this issue for the Company will increase sharply 4-5 times from 2022 due to the liberalization of the market and the transition to flat-rate tariff regulation.
The company will have to include it in next year's tariff revision to make up for the loss caused by the profit tax paid on the unearned profit. According to the company's calculations, this loss may amount to 46.7 million AMD by 2021.
In the future, in case of the need to release more than 170 million cubic meters of water from Lake Sevan for irrigation in order to avoid such situations, the Company will have to propose to the Armenian Government to consider the possibility of conducting that additional water through the Company's infrastructure without additional electricity production".
March 02, 2022 at 11:08