Electricity fees will be reduced by 3.54 tetri (about 2.14 cents) for first and second step tariffs starting from January 2013, according to the Georgian energy ministry.

Reduction will not apply to a third step tariff – those who consume more than 301 kilowatts per month, which will remain unchanged at 17.69 tetri (about 10.69 cents) in Tbilisi and 17.5 tetri (about 10.57 cents) in regions.

Under the proposed scheme those households of Tbilisi who consume less than 100 kilowatts of electricity per month will pay 9.48 tetri from January, instead of current 13.48 tetri (approximately 8.14 cents) per kilowatt and consumers using between 101 to 300 kilowatts per month will pay 12.46 tetri instead of current 16 tetri (about 9.67 cents) per kilowatt.

Households in the provinces, who use less than 100 kilowatt per month, pay 12.98 tetri (approximately 7.8 cents). This first step tariff also applies to those households in the provinces, who have no individual meters and are connected to common meters. Residents in the country’s regions who consume between 101 and 300 kilowatts pay 16.52 tetri (about 9.9 cents) and residents in the regions who consuming more than 301 kilowatts per month pay 17.5 tetri (approximately 10.5 cents).

Electricity distributor in the capital city is Telasi – company in which 75% of shares is owned by Russia’s state-controlled power trader Inter RAO and 24.53% of its shares is owned by the Georgian state.

Different tariffs apply to consumers outside Tbilisi, where electricity is distributed by Energo-Pro Georgia, a local subsidiary of the Czech company Energo-Pro, which has about 864,000 customers and by a separate company in the eastern region of Kakheti.

Lowering of tariffs will also apply to first and second step consumers in the provinces as well, according to the energy ministry.

Consumers in the provinces, who use less than 100 kilowatt per month, will pay 9.44 tetri instead of current 12.98 tetri (approximately 7.84 cents) per kilowatt of electricity. This first step tariff also applies to those households in the provinces, who have no individual meters and are connected to common meters. Consumers in the regions who consume between 101 and 300 kilowatts will pay from January 12.98 tetri instead of current 16.52 tetri (about 9.98 cents).

Kakha Kaladze, the energy minister, said on December 24 that provisional memorandums have been signed with electricity distributor companies based on which it would be possible to reduce tariffs from January “without any preconditions”.

“This is a temporary memorandum for a three month period, so discussions will continue in this period and further reduction of tariff is not ruled out,” Kaladze said.

Tariff revision requires endorsement from the Georgian National Energy and Water Supply Regulatory Commission.

Speaking at a news conference on December 24, PM Bidzina Ivanishvili said that reduction of electricity tariffs would apply to “about 90% of population”.

“It will bring a huge relief to the Georgian population,” he said and praised energy minister Kakha Kaladze for “a good job”.

PM Ivanishvili also said that work was still ongoing on reduction of tariffs for consumption of natural gas. He said that he would probably be able to announce specific details after his visit to Azerbaijan, planned for December 26.

Households in Tbilisi currently pay 50.62 tetri per cubic meter of gas and the tariff varies for 49 to 55 tetri in the provinces.