The increase in electricity tariffs is part politics and part simple economics. One of the largest factors is the higher gas prices Georgia now pays Gazprom. This year the cost of natural gas nearly doubled to over $100 for 1000 cubic meters. But energy analysts also claim that regardless of Georgian-Russian politics, the low tariffs Georgians paid for electricity had to be increased. According to the leadership at the United Energy Distribution Company [UDC], even with 100% collection, which they have never achieved, the company was still facing losses of several million dollars.

However, even UDC argued against the tariff policy developed by the GNERC. According to the current policy, electricity customers are divided into three pay groups depending on the amount of electricity they consume. The break down, 0-100 kilowatts, 100-300, and over 300 kilowatts, is absolute – meaning if you use 101 kilowatts of electricity one month, the whole sum is calculated in the higher price bracket, not merely the 1 kilowatt that put you over the limit. The new tariff is particularly difficult for rural customers. While prior to June 1, they paid considerably less than urban customers, now the fees are relatively similar and depending on their usage, rural customers can be charged up to twice as much as they paid before.

At first glance, the prices don’t seem that outrageous. Rural households used to pay eight tetri (cents) a kilowatt; now fares range from 12.98-17.4 tetri per kilowatt, or roughly $0.07 - $0.10. Urban customers are paying roughly half a cent to five cents per kilowatt more than the previous urban tariffs. However, with rampant unemployment in the rural areas – and lower collection rates even before the increase – rural families are bracing themselves for a return to life without electricity.

According to GNERC, the new tariff policy is the easiest way they could implement the needed changes. They maintain that electricity is a product that must be paid for – and if the price is high, that means it is up to customers to prioritize what appliances they use and how long they use them. But another problem is the fact that many villages depend on collective metering that monitors usage per street instead of per family. The pure volume of users now means that all families dependent on the meter will be forced to pay in the higher price bracket.

The billing practices of the distribution companies are also causing rural residents concern. A month ago, villagers in the Lanchkhuti region of Guria received bills claiming they all had back debts. This was in addition to the ‘back debts’ they had been forced to pay several months ago. Since their bills are hand delivered by a neighbor chosen by random by the distribution company instead of an actual representative of the company, there is no obvious path of recourse to reverse the charges or even a clear responsible party to explain the problem to.

While Georgians during the government of former president Eduard Shevardnadze found creative ways to receive their electricity and gas for free, now there is a general understanding that these utilities must be paid for. However, in light of the current economic crisis in the rural areas throughout the country, forcing customers to pay twice as much as they used for electricity is a huge burden for families who are already living in poverty.

One of the few things the new government has done for the regions outside of Tbilisi is to provide, at long last, 24 hours of electricity nearly every day all year long. President Saakashvili is facing mounting opposition in face of the difficult reforms the country must implement. If it is mandatory for the electricity sector to become sustainable immediately, a tariff system based on income and usage – or a subsidy for the poorest segment of the population – would be a generous gesture from the government during this painful period of transition.