GEO

False alarm over IDP electricity subsidies underscores continuing confusion about benefits

06 October, 2010

In late August we received a call from an IDP who claimed that the new settlements were no longer receiving electricity subsidies. After the government’s failure in fall 2009 to properly warn IDPs of cuts to their energy subsidies (resulting in many families accumulating hundreds of lari in debt and losing their electricity during the winter, which we documented here), we were very worried about this news. Fortunately, this latest rumor turns out to be a false alarm—a result of a technical/administrative issue within the MRA—but it once again highlights the confusion surrounding IDP benefits and the lack of government accountability to IDPs. We looked into the claim by conducting a dozen interviews with IDPs in Tserovani and Khurvaleti settlements and making a few phone calls to the MRA and EnergoPro Georgia, an electricity distribution company. By law IDPs should receive 100 kWh per person each month, equivalent to GEL 12.98 per person. The monthly subsidy is credited to each household’s electricity bill (and the unused portion can be saved and applied to future consumption), but the credit was not applied in June and July. Yet, even though some families owed money without the subsidy credit, their electricity had not been cut off. Eka Kikalishvili of Energo-Pro Georgia explained that they “are still waiting for the MRA to send us the list [of qualifying IDP beneficiaries], after which IDPs will be given their subsidies.” She noted that the funds for June and July had already been transferred from the MRA to Energo-Pro-Georgia, but they would remain "frozen" until the Ministry finalizes the beneficiary list. The MRA confirmed that the electricity subsidies for IDPs were in fact not cut off, but simply delayed. As they explained, “The MRA is arranging individual meters for IDPs living in the collective centers. Since our beneficiaries list is uniform, we had to suspend the subsidies also to those who live in the new cottage settlements.” It is not clear why installing individual meters in collective centers should affect their ability to provide a list of IDPs living in the new settlements. IDP families are able to save the unused portion of their subsidy and apply it to future consumption. This is done through a credit/debit system marked on the monthly bills, although in our interviews with IDPs we found that many do not fully understand the accounting, including how much electricity they have used in a given month, the amount of the state subsidy, the monthly and accumulated savings and how the current month’s electricity usage is deducted from the savings. The only thing they all clearly understood is whether the total amount on the bill is negative or positive. There are a few lessons from this issue: • The delay in the debit/credit system has caused uncertainty over future energy subsidies. Some IDPs believe that the state subsidies have been completely cut off and they will be responsible for covering the full amount in future. • Some IDPs still do not understand the subsidies scheme, by which they can save summer subsidies for winter consumption. A few incorrectly believed that the subsidies cannot be saved at all, indicating a complete lack of understanding about the billing and credit system. •The debt that some families accumulated after the confusion over subsidies in 2009 is slowly being repaid through today’s subsidies. For example, we met two families in Khurvaleti who have been living without electricity since January of this year. They are waiting until their current monthly subsidies cover their past bills. But with a bill of GEL 560, it will take one family of three that we met until March 2011 to pay off their debts if they are unable to find another income source to pay it.

Author: Mariam Khotenashvili and Caitlin Ryan