Energy, Energy Market, Latvia, Taxation

Karins said that next week Economics Minister Ralfs Nemiro (KPV LV) will present the end report to the government on amendments to the law on electric energy market, but there are concerns about three potential risks if MPC is phased out at the end of March.

“The end report will be presented only next week, but from what I have heard it is clear that there might be three significant risks if MPC is liquidated at the end of March that Latvia cannot afford. Loss worth EUR 1 bn in trials against the Latvian states and immediate rise of electricity and heating energy prices,” the prime minister said.

The Economics Ministry has prepared amendments to the law on the electricity market for scrapping MPC and will submit it to the Cabinet of Ministers at the end of March.

Nemiro said that the ministry has discussed the situation with the involved parties, there had been meetings with the Finance Ministry, the Public Utilities Commission, Latvenergo and Augstsprieguma Tikls, the Latvian Chamber of Commerce and Industry, the Latvian Employers Confederation and a number of NGOs.

The legislative amendments have been prepared to complete the task given by the Saeima earlier. The legal assessment of the amendments will be ready in the coming days.

The minister said that if Saeima decision to scrap MPC as of March 31 is fulfilled, it might promote increase of electricity prices in the wholesale market. The Federation of Renewable Energy Resources said that in that case all power plants with a capacity of up to 1 megawatt will stop their operations. The Latvian Council for Cooperation of Agriculturalist Organizations (LOSP) noted that the small farmers who operate with renewable energy resources might become insolvent without this support. Also, heating tariffs might rise by 20-40%.