Utility Pricing and the Poor : Lessons from Armenia

Increasing cost recovery for utilities is a cornerstone of the Government of Armenia's economic reform program. This report assesses the 1999 electricity tariff increase and the potential for future improved water sector cost recovery, with particular attention to questions of service accessibility and affordability for the poor . The burden of energy expenditures is large for most households, particularly for the poor. Electricity makes up the bulk of these expenditures, and a further increase in tariffs, without increasing access to low cost substitutes, would lead to the greatest hardship for the urban poor. Future electricity tariff increases should be closely coordinated with improved price response prediction and credible action to mitigate the potential impact on the poor and the environment. The water utilities are caught in a low-level equilibrium trap, characterized by decreasing service quality and revenue. The water utilities must break out of this trap by generating more revenues through improved service delivery. A two-stage approach is recommended. In the first stage, revenues should be increased by enforcing payment from the households that currently have reliable service but are not paying their bills, in the second stage, after collection capacity is strengthened, the utility should start a program of tariff adjustments, based on improved service and meter-based billing.

Bibliographic Details

Main Authors:	Kolb, Anthony A., Lampietti, Julian A., Gulyani, Sumila, Avenesyan, Vahram
Language:	English en_US
Published:	Washington, DC: World Bank 2001-05
Subjects:	AIR POLLUTION, BILL COLLECTION, BILLING, BIOMASS, CASH TRANSFERS, CENTRAL PLANNING, CONSUMERS, CONSUMPTION PATTERNS, COOLING, COST RECOVERY, COST-RECOVERY, CPI, CROSS-SUBSIDIZATION, DEBT, DEFORESTATION, DISTRIBUTION SYSTEM, DISTRIBUTION SYSTEMS, DRINKING WATER, ECOLOGY, ECONOMIC GROWTH, ECONOMIC SITUATION, ECONOMIES OF SCALE, ELECTRICITY, ENERGY CONSUMPTION, ENVIRONMENTAL PERFORMANCE, ENVIRONMENTAL PROBLEMS, EQUILIBRIUM, EXPENDITURES, EXTERNAL COSTS, FIXED TARIFF, FOREST MANAGEMENT, GOVERNANCE OF WATER, HEAT, HOURS OF SERVICE, HOUSEHOLD BUDGET, HOUSEHOLD CONSUMPTION, HOUSEHOLD DEMAND, HOUSEHOLD DEMAND FOR WATER, HOUSEHOLD WATER, HOUSEHOLD WATER CONSUMPTION, HOUSEHOLDS, IMPORTS, INCOME, INFLATION, IRRIGATION, IRRIGATION MANAGEMENT, LANDFILLS, LITERS PER CAPITA PER DAY, LOW-INCOME HOUSEHOLDS, MANAGEMENT OF WATER, MARGINAL COST, MARKET PRICES, MINING, PLUMBING, POVERTY LINE, PRICE CHANGES, PRICE DISTORTIONS, PRICE OF WATER, REAL WAGES, RESIDENTIAL CONSUMERS, RESOURCE ALLOCATION, SERVICE DELIVERY, SERVICE IMPROVEMENT, SERVICE QUALITY, SEWERAGE, SOLID WASTE, SOLID WASTE COLLECTION, SUSTAINABLE DEVELOPMENT, SUSTAINABLE GROWTH, TARIFF ADJUSTMENTS, TARIFF INCREASE, TARIFF REFORM, UNEMPLOYMENT, URBAN AREAS, URBAN HOUSEHOLDS, UTILITIES, UTILITY REVENUES, UTILITY SERVICES, WASTEWATER, WATER BILLS, WATER CONSERVATION, WATER CONSUMPTION, WATER DEMAND, WATER MARKETS, WATER METERS, WATER NETWORKS, WATER PRICES, WATER PRICING, WATER QUALITY, WATER SECTOR, WATER SECTOR REFORM, WATER SERVICE, WATER SOURCE, WATER SUPPLY, WATER SYSTEM, WATER TARIFF, WATER TARIFFS, WATER UTILITIES, WATER UTILITY,
Online Access:	http://documents.worldbank.org/curated/en/2001/05/1121264/utility-pricing-poor-lessons-armenia https://hdl.handle.net/10986/13913
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