Karlis Mikelsons

The sudden energy tariff rise is grounded, however at the same time it is also a result of three-year long negligence, because Latvenergo had repeatedly approached the Public Utilities Commission (Regulator) and the government, asking them to change distribution networks tariffs according to the actual situation, the former Latvenergo Board Chairman told the business news portal BNN.

He stresses while he was in office all Latvenergo claims were dismissed, while at the moment they are all of a sudden approved. The situation is more dramatic, because the issue was prolonged and soaring during the past years. Sadales tīkls has operated only with losses during the previous years, because energy tariffs do not meet the actual costs. Regulations of the European Union stipulate that energy selling companies cannot subsidize energy distribution networks. Since we have joined the organization, we must comply with that, he indicates, adding that Latvenergo and the Regulator were in mutual legal proceedings, due to the Regulator not allowing to increase AS Sadales tīkli tariffs. Most probably they are not topical any more, as the Regulator has agreed to tariffs rise.

BNN already reported, the Public Utilities Commission (PUC, Regulator) has approved AS Latvenergo new energy tariffs project, envisaging a new procedure of calculating tariffs starting from April 1, according to Latvenergo board member Uldis Bariss.

Latvenergo’s tariffs project has fully complied with the legislation, thus there were no grounds for the Regulator to refuse it.

According to the new tariffs plan, households consuming more will have to pay more as well. The tariff will depend on the consumption during the year and it will be calculated starting from April 1. The current tariff – 8.25 santims per kWh – will have to be paid for the first 1 200 kWh, while when this is exceeded a tariff of 10.74 santims per kWh will set in.

The company has estimated monthly electricity bills will surge one lat for 30% households and 4.36 lats on average for 16%. 6% of the households will face more than ten lats bigger electricity bills. Half of the households will not be affected by the tariff rise at all.

Legal persons not obliged to purchase electricity on the open market will be applied the market price starting from April 1. They will be able to choose from three tariff plans instead of the previous one.

According to Latvenergo, the tariff will change by 21% staring from April 1.

These activities of the company have been criticized, saying that it is not only the wealthy consuming a lot of energy, but also large families and families using heat pumps, boilers or similar devices. Moreover, it has also been doubted whether the half of households not to be affected by the tariff actually includes households only.

The energy concern is resolved to expand its support programs, thus large families in addition to the start-up 1 200 kWh with the existing tariff will be able to pay for 2 400 kWh the same way as well. While needy families with children in addition to the start-up 1 200 kWh will get 500kWh more. The support programmes are to be carried out in collaboration with municipalities.