Energy, Financial Services, Latvia, Legislation

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Mandatory procurement component to decrease 10% for most consumers in 2018 in Latvia

BC, Riga, 22.11.2017.Print version
Starting January 1, 2018 the mandatory procurement component in electricity rates will reduce 10% for most consumers, Economics Minister of Latvia Arvils Aseradens (Unity) told reporters after the government's meeting yesterday, cites LETA.

Earlier, the Cabinet supported the Economics Ministry's decree on reducing joint-stock power utility Latvenergo's share capital by EUR 454.4 million in order to reduce the mandatory procurement component for companies and households, effective January 1, 2018. Thanks to the government's decision, the overall cost of mandatory procurement component for consumers will reduce by EUR 716.47 million and for the state by EUR 262.06 million.


"The overall reduction in the cost of mandatory procurement component will be close to 29%. For households, the component's cost will decrease no less than 8%, while for most consumers the cost could decrease by 10%," said the minister.


As a result, companies' competitiveness and the economic environment will improve, said Aseradens. According to the Economics Ministry's initiative, the average mandatory procurement component will decrease from EUR 26.79 to per megawatt-hour (MWh) to EUR 25.79 per MWh already next year, and then to EUR 24.92 per MWh in 2020. It will decrease even more for energy-intensive companies.


Prime Minister Maris Kucinskis (Greens/Farmers) told reporters after the Cabinet meeting that, when his government was being set up, the ministers agreed to stop the mandatory procurement component from increasing, and businessmen were promised that measures would be taken to ensure competitive electricity rates.


"The government's decision today is a major step that will contribute greatly to economic development. If we can also bring the inactive permits to a halt, that will be our contribution," stressed Kucinskis.






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