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Tuesday 25.09.2018 | Name days: Rauls, Rodrigo
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To prevent fraud, audit of MPC recipients to be performed in Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvian Economy Ministry intends to perform an audit of mandatory procurement component recipients and use new regulations to combat fraudulent activities, as confirmed by Economy Minister Arvils Ašeradens.

The minister emphasizes that if suspicions regarding fraudulent activities at CHP plants are confirmed, it will serve as an example of businessmen abusing the existing regulations in their interest.

Based on suspicions regarding possible dishonest actions performed by businessmen with permits to produce electricity at CHP plants, Economy Ministry has developed an action plan to prevent possible violations.

The ministry has developed amendments to rules on electrical energy production and price calculation for CHP plants. Officials have established the final terms for permits for businessmen who have yet to commence energy production.

To be certain of the compliance of the work performed by Sadales tīkls with the current order, an audit will be performed. To be certain that companies that receive MPC, contracts and other aspects fit requirements of the law, an audit will be performed among businessmen.

«It is necessary to check activities performed by all CHP plants. If the system does not function as it should, a general audit should be performed,» says Ašeradens.

As it is known, Economy Ministry has submitted a request to the State Police regarding Sadales tīkls’ and Rīgas enerģija’s actions in relation to possible permit fraud with electricity procurement.

As previously reported, Nekā Personīga took notice of several companies that have failed to complete their projects in time but have nonetheless kept their permits. It is believed that they used a mobile generator to connect to Sadales tīkls to pass the electricity production test. If those companies commence work and use the opportunity to sell electricity at high prices, it will cost consumers up to 100 million euros in MPC fees in the next ten years.

Economy Ministry informed journalists that inspections will be performed in the following companies: SIA Briedis būve, SIA Madonas Eko, SIA Tektus, SIA M parks, SIA E Strenči, SIA E Seda, SIA Elektro rīdzene, and SIA Rīgas enerģija.

Jānis Bordāns had previously told BNN in an interview: «The country has been paying the so-called MPC for allegedly environment-friendly energy for years. However, this policy mainly benefits owners of small power plants, their associates and other beneficiaries, not consumers or the environment. It is clear that separating the tariff, using which the state procures this energy, from the natural gas market price was a mistake. The gas price has dropped. This means the government has provided a great deal of assistance to companies that would not have survived in a free market environment. With that, it seems are the ones who subsidized businesses close to people in power,» Bordāns comments.

She says MPC regulation needs immediate corrections to prevent situations when the permit for production of green energy is introduced only formally. It is also important to state that allocated quotas should be provided no later than six months after launch of the power plant.

At the same time, he says: «It is highly important to ensure support is provided only to energy produced from renewable resources. Right now most MPC payments are performed for energy not produced using renewable energy resources. We also have to make sure the energy produced is really green. The price we pay for such energy should be carefully monitored as well. Another question worth asking is whether or not production causes more harm than benefits for the environment».

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