Amendments developed by the Ministry of Climate and Energy to the Law on measures to reduce extreme increases in energy prices provide for partial compensation of the distribution system tariff – by 60%.
This will cost the state approximately 30.5 million euros, which will be covered by the share of profits to be paid in the dividends of Latvenergo.
The head of the Saeima budget and Finance Committee Jānis Reirs justified this solution on the basis of the obtained data that the distribution network “Sadales Tikls” purchases electricity to cover losses and maintain voltage from the parent company Latvenergo for 140 euros per megawatt hour – considerably more expensive than the stock exchange price, thus artificially growing the profit of Latvenergo.
“Then there was this very logical proposal that in this way it should be compensated from the large profits of Latvenergo, where one of the components of the profit is the expensive sale of energy to distribution networks. I think this is the right decision, but I will remind you that only temporarily until the end of the year,“ Reirs said.
This will reduce bills by 18% on average, but they will be higher than before the increase in distribution tariffs in July this year.
The Ministry of Climate and Energy has estimated examples of amounts without value added tax (VAT):
- For a household with a one-phase and 16 amp connection, the fixed component tariff after 60% reduction will be 2.43 euros instead of the previous 6.08 euros.
- For a household with one phase and a 20 amp connection, the rate will drop from the previous 7.6 euros to 3.04 euros.
- For a household with a three-phase and 20 amp connection, the fixed component charge will drop from €18.4 to €7.36 without VAT.
- For a household with a three-phase and 25-amp connection, the rate will be 9.20 euros instead of the previous 23 euros.
The aid for September is planned to apply to bills issued in October.
During these months, the Ministry of Climate and Energy also plans to make the option of choosing smaller connection capacities more widely known, as in many cases they are not fully used and therefore often the customer pays for an unused service.