Private Energy Retailer Seeking Bigger Role

Private Energy Retailer Seeking Bigger RolePrivate Energy Retailer Seeking Bigger Role

The chief executive of a small electricity company criticized the Energy Ministry for obstructing the activities of small producers and patronizing the government's monopoly.

Iman Qahari told Shana that the ministry has limited the scope of energy retailers' activities.

"Not only our trade volume in the Iran Energy Exchange and outside has been curbed, but energy retailers have also been limited to selling electricity only to industrial subscribers," he said.

The limitation to only supply industrial users can drive electricity retailers out of business, as their electricity prices remain heavily subsidized, making competition with the state impossible for these private energy companies. Total traded electricity on IRENEX exceeded 6 trillion rials on Tuesday, according to Sena.

The day's trading volume was a milestone for IRENEX. Traders bought and sold 5,926 electricity futures contracts worth 55 billion rials.

Offering electricity at competitive prices on the IRENEX could help energy retailers thrive and slowly move the industry away from state control, but the Energy Ministry seems to be against the Idea.

Other than limiting energy trading and the market, the ministry limits retailers' output and also makes it hard to get an electricity retailing license. A competitive electricity market will allow customers in the long run to choose their power supplier from among several companies, as opposed to being a customer to a single, usually state-owned distributor.

In addition, electricity retailing in the bourse will not only make prices competitive but also increase the quality of services.