Energy, EU – Baltic States, Latvia, Legislation

International Internet Magazine. Baltic States news & analytics Wednesday, 24.01.2018, 03:16

Opening of electricity market to increase rates for Latvian households

BC, Riga, 05.02.2013.Print version
Taking into account the factors that determine electricity rates, it is quite certain that opening of the electricity market for Latvian households will increase their light bills this fall, as several experts participating in a discussion hosted by the Nozare.lv business portal agree, informs LETA.

The current "Start" tariff of 8.18 santims per kilowatt/hour (kWh), charged on the first 12000 kWh consumed by households during a year, may increase by 38%, whereas the subsequent "Basic" tariff, currently 10.62 santims per kWh, may increase by 5% to 7%.


It is possible that several factors may change by September 1 – the mandatory procurement components, which are used to support cogeneration plants and renewable energy producers, may change, as well as the market price for electricity.

 

According to Enefit, subsidiary of the Estonian power utility Eesti Energia, taking into account that the mandatory procuremement components will increase to 1.89 santims per kWh on April 1, and assuming that electricity market price does not change, electricity end price will be 11.31 santims per kWh in September. However, the head of the Economy Ministry's Energy Department, Dins Merirands, said during the discussion that solutions were being considered now so the higher mandatory procurement component does not have a severe impact on households.

 

Latvian power utility Latvenergo board member Uldis Bariss stressed in turn that the tariff which, in his company's opinion, is based on actual electricity cost, is the "Basic" tariff. Therefore, if the mandatory procurement components increase as expected and electricity market price does not change significantly, the end prices will increase by 5% to 6%. However, electricity prices on the market are hard to predict and changes in the prices are a possibility, he added.

 

Merirands said, however, that there would be no "Start" or "Basic" tariffs after the electricity market is deregulated.

 

Already from July 1, 2007, everyone in Latvia, including households, may choose their electricity supplier instead of paying the regulated tariff for electricity they consume. Regulated tariffs currently apply only to households.

 

The regulated tariffs were last changed on April 1, 2011. Households that consume more electricity have to pay more than those households that consume less electricity.






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