8 - Non-payment and Theft

Summary

Focuses on the reform measures needed to improve payment collection rates and improve the financial viability of energy companies, in the context of the market-based reorganization of energy supply. Besides artificially low energy tariffs, non-payment of energy bills and theft of energy are major causes of the financial difficulties which the utilities face in Central Asia, and in transition and developing economies more generally. Chapter 7 examines the tools that Central Asian law provides to the energy companies to enforce the payment of energy bills and critically discusses judicial practice in the field. Surprisingly, the courts generally play an active role in the enforcement of payment claims. However, utilities find it much more challenging to enforce payment claims against enterprises of strategic interest (e.g., agricultural producers and aluminium and mining companies). The political sensitivity of the energy supply often predetermines the outcome of judicial decisions in non-payment cases.