Electricity distribution tariffs could rise by 75% next year in Latvia

Take note – story published 1 year ago

The electricity distribution system operator AS “Sadales tīkls” (ST) has submitted a new draft tariff to the Public Service Regulator Commission (SPRK), which provides for an average increase of 75% in rates. The specific changes will depend on the customer's connection and consumption habits, the company said on November 14.

For a typical household, residents of multi-apartment houses with a consumption of approximately 100 kWh per month, the tariff increase, including the transmission tariff fee included in the distribution tariff, will be EUR 6-8.

ST noted that the transmission and distribution service accounts form a small part of the customer's electricity bill, so the overall increase in electricity charge will be much smaller.

The need for an increase in the distribution tariff is explained by the fact that the planned increase in the electricity transmission tariff, the rapid increase in prices of electricity, and resources needed for the maintenance and development of the electricity grid represent an increase in the costs necessary to provide the ST distribution service of €183 million per year.

The company said that over 2/3 (69%) of the increase in costs in the tariff project is due to a 102% increase in the transmission tariff (an increase from 71 to 144 million euros per year) and the electricity costs needed to manage electricity (an increase from 16 to 69 million euro per year), which is purchased by the distribution operator at market price. Prices of resources needed to operate the company – wood, metal, fuel, logistics services, etc. – have also increased as a result of inflation.

The new distribution tariff is scheduled to enter into force on July 1, 2023. At the same time, in order to move the changes gradually and thus reduce the overall increase in the tariff fee, the ST has submitted a proposal for a tariff adjustment by SPRK and, consequently, a partial increase in the fee from January 1, 2023.

At present, the “distribution network” looks forward to the Commission's assessment in order to improve the proposal if necessary.

The ST said that until April 30, 2023, in the context of State aid to electricity users, the distribution system services fees will still be reduced in full.


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