Azerbaijan plans to introduce fixed tariff in electricity sector

A fixed tariff may be introduced in Azerbaijan's electricity sector, as provided for in the draft amendments to the law "On Electric Power Industry".

According to Report, the document was discussed at today's meeting of the parliamentary committee on natural resources, energy and ecology.

In international practice, there are cases of applying fixed tariffs when regulating electricity tariffs and prices. The main essence of a fixed tariff is that consumers connected to the grid pay a certain amount monthly in the form of fixed expenses.

The fixed tariff is not related to consumption volume, is applied regardless of consumer category and is used to cover certain expenses of the distribution system operator. The bill defines a fixed tariff as a monthly tariff element applied to each consumer with the purpose of covering part of the fixed costs that do not depend on the level of electricity consumption, as determined by the regulator.

The document also defines the rights and obligations of the supplier and consumer in connection with the implementation of the new tariff mechanism.