Electricity bills to shrink for 650,000 households

As a result of differentiated mandatory procurement component in electricity rates, electricity bills will increase for about 390,000 households and decrease for about 650,000 households, according to the Economics Ministry's estimates.

At the same time, the ministry notes that part of grid connections actually consume no or very little electricity (for instance, summer cottages and community gardens), and for those users electricity will become costlier.

As reported, on October 4 the government approved amendments to the Electricity Market Law differentiating compulsory procurement component in electricity rates for energy-intensive companies, based on their connection capacity and electricity consumption volumes.

According to the amendments, the average mandatory procurement component will reduce for companies with connection capacity of 110 kilovolts (kV) and 6 to 20 kV, as well as households with connection capacity of 0.4 kV, and increase for the rest of consumers with connection capacity of 0.4 kV.

The Economy Ministry explains that the latter group of consumers is less sensitive to changes in electricity rates as it includes, for instance, stores, offices, etc.

The changes will prompt consumers to choose more effective connection capacities, as well as increase electricity consumption in Latvia in the long term as they will create more favorable environment for energy-intensive companies.

The rates will increase for households with low electricity consumption, but the increase will be compensated for protected consumers.

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