- Sarosh Sattar, and Clinton Shiells
- Published Date:
- April 2004
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At the time of writing, the authors were affiliated with the European Bank for Reconstruction and Development (EBRD). The views expressed in this chapter are the views of the authors, not of the EBRD. The chapter draws on the analysis in EBRD (2001).
An alternative is to introduce a lifeline tariff with a low free consumption block and a high marginal tariff, together with the option to pay a unit tariff over all consumption at a lower marginal rate. This mechanism docs not impose higher tariffs on consumers, rather, it allows them to choose whether or not to pay a higher rate.
In the above example of the Toktogul Cascade, the conditions for power trade are present even without adding a charge For water. However, between the Kyrgyz Republic and Kazakhstan, for instance, power trade would not take place based on cost differences for power generation alone.
Individual case studies from the transition economies are reviewed in Annex 1 of Kennedy, Fonkhauser, and Raiser (2003).