Electricity distribution rate growth ceilings set for next two years

Between January of the following year and December 31, 2025, ceilings for the increase in the fixed share of the power distribution tariff will be set for electricity users – households, as stated in the amendments to the relevant laws approved by the Saeima on November 23.

The electricity transmission system operator “High Voltage Network” (Augstsprieguma tīkls, AST) and distribution system operator “Distribution Network” (Sadales tīkls, ST) will have to include tariff forecasts in the 10-year system development plans. Both operators will be obliged to submit a new draft tariff to the Public Utilities Commission (SPRK) if the estimated costs of providing the system services for the next tariff period exceed the level of deviation of the maximum tariff values, which in turn should be set by July 1, 2025.

Transitional provisions have been adopted, stipulating that by December 31, 2025 household customers will be subject to an increased ceiling for the fixed part of the electricity distribution tariff for 12 months with single-phase (1F) and three-phase (3F) connections and a current of 16, 20 and 25 amps.

More than 95% of households have any of the mentioned types of connection.

Under the bill, the maximum value for which the monthly rate for maintaining capacity will be able to rise from a year earlier will be between EUR 2 and 3 for a one-phase connection and between EUR 4 and 6 for a three-phase connection depending on the amps.

Representatives of the Ministry of Climate and Energy have previously stated that currently more than 28,000 users have reviewed and adapted their connection capacities according to their needs.

The bill authors said changes in electricity distribution system service tariffs this summer highlighted a series of regulatory loopholes. The rapid tariff changes led to a decrease in confidence both in the service provider and in the public administration as a defender of the public interest.

“The purpose of the amendments is to promote transparency and predictability in relation to regulated services - especially in the energy sector, where certain providers providing the service at a regulated price serve a very large number of users, including households,” the annotation of the changes to the laws reads.

AST and ST developed draft tariffs last year. According to the planned total revenues from electricity transmission in the project, it was planned to increase the tariff 2.1 times, while ST planned to increase the electricity distribution tariff by 75% on average. The government and the Saeima ordered the ompanies to review tariffs. 

On July 1, changes to tariffs for electricity transmission and distribution system services came into force.

To reduce electricity bills, between October and the end of the year, the state will offset 60% of the fixed portion of the allocated distribution tariff.

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