Rēzekne accused of heat price gouging last winter

Last heating season in Rēzekne, heating tariffs were not revised until after the end of state aid, although the City Council was aware of the possibility of reducing costs. There are suspicions that some of the state aid that was available last winter went to the municipal heating company, not the population, according to an audit carried out by State Audit Office.

Ilze Bādere, member of the State Audit Office Board, said that Rēzekne municipality had information that the heating tariffs should have been around EUR 151.9 per megawatt hour and starting from March even lower. Still in May 2023, the heating tariff in Rezekne was EUR 214 per MWh – the highest in Latvia, according to the Public Utilities Regulation Commission (SPRK).

“Meanwhile, residents and businesses continued to receive thermal energy services that did not meet the cost. In fact, the company produced thermal energy at a tariff of 128 [euros per MWh] but sold for 214 [euros per MWh] - almost twice as much,” Bādere said.

At the time, support was provided from the state budget to reduce heating bills, with the state compensating for half of the heating increase.

Accordingly, it can be concluded that in Rēekne the municipality used the State aid resources not only for the intended purpose – to provide support to the financially vulnerable groups of the population, but also to increase the profit and current account of Rēzekne Thermal Networks Ltd.

Overall, LLC “Rezekne heat networks” received EUR 8.33 million for the heating season 2022/2023. Since the tariff was reviewed only after the end of State aid measures, according to the auditors, the State SIA “Rezekne heat networks” was paid at least EUR 4.55 million more than would have been the case after the revision of the heat supply tariff.

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