Electricity Market Watch - Retail tariff update

Effective from April 1, 2026, the retail electricity tariff increased by 5 tetri/kWh for households, representing an average rise of 27.2%, while business tariffs increased by 4-7 tetri/kWh, or 20% on average. The change applies to customers of both Telmico (Tbilisi) and EPG Supply (regions).  Retail tariffs are set by the Georgian National Energy and Water Supply Regulatory Commission (GNERC) under a predefined and transparent methodology. The current increase is mainly driven by two factors: higher investment plans and rising electricity procurement costs.

The tariff increase directly raises utility costs for both households and those businesses that purchase electricity on the retail market. In our view, the change will also have several additional effects: The tariff increase will add around 0.7 percentage points to the overall price level (inflation); Higher investment spending will support infrastructure upgrades and help reduce outage frequency, especially in the regions; More expensive electricity will strengthen business interest in self-generation, as was seen after the sharp tariff increase in 2021; Rehabilitation of the transmission network and substations may also reduce grid-connection costs for small power plants; It is important to note that the change in the retail tariff does not determine the selling price of power plants. Given the structure of Georgia’s electricity market, generation assets sell electricity on the wholesale market, while the retail tariff is formed on the basis of those underlying costs. Accordingly, wholesale prices change first, and the retail tariff then reflects these changes.