July 2023 - In Central Asia, the lack of clarity on the part of both regulators and utilities regarding the real cost of service is one of the biggest challenges shared throughout the region. By improving their capacity to evaluate the true costs of providing service, regulators and decision makers can gain a better sense of what measures could be taken to address a financing shortfall in the energy sector.
Further, reevaluating the current cost allocation among different customer classes as well as overall subsidies to the sector, while finding new strategies for vulnerable customer protection, are crucial activities toward finding a way to ensure that electricity services remain affordable to all customer groups. Vulnerable customer protection is especially important when moving toward more cost-reflective tariffs to ensure customers’ ability to pay is under consideration.
With support from the United States Agency for International Development (USAID), the National Association of Regulatory Utility Commissioners (NARUC) has produced a set of four guidelines on regulatory accounting for the context of Central Asian energy sectors. They include the following:
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