Electricity prices in Latvia 2.6 times higher than in 2020

The average electricity price was 2.6 times higher last year than in 2020. Such a large increase in electricity prices has not yet been seen, Latvian Radio reported January 24.

The largest electricity producer and trader in Latvia is Latvenergo, which trades electricity under the Elektrum brand – they serve 80% of households and 80% of businesses. Latvenergo sales director Uldis Mucenieks told Latvian Radio that the largest price increase in December was for those customers who bought electricity at the exchange price.

He pointed out: "December was indeed one of the highest [prices] months in history, the average exchange price in Latvia was over €200 per megawatt-hour, over €100 in September last year, as the increase has been quite rapid [..]. What we offer, if there is a debt, to split its pay over a longer period of time. We also faced some difficulties in paying off in the context of the limits imposed by Covid, and we were able to deal with this problem in good time."

Electricity is also sold by Baltcom, which also sells the Internet and television to its customers. The company's sales director, Konstantīns Borovikovs, said the company is trading electricity to almost 5,000 households and prices have increased twice.

The government intends to allocate €250 million to compensate for rising energy prices by the end of April by reducing some of the additional electricity charges. Baltcom spokesman Borovikovs estimated that this decision would reduce the bills, but that price increases would not be compensated.

“Our share of electricity in the overall tariff is about 30%. Namely, if a person pays a bill of €100, what we can have as an electricity trader is €30. The other 70 are taxes, OIK, distribution network tariffs, namely those that remain the responsibility of other companies or the State. The first aid from the government was already granted in December. [..] As of January 1, the OIK will be reduced [..] but there are concerns that after May 1 the aid will not be extended,” he said.

“Enefit” board member Martins Vancāns said that the company services 45,000 households and 2.5 thousand businesses in Latvia, and there are no big problems with paying bills right now.

Since the company is owned by a large Estonian company, Eesti Energia, which markets electricity in six countries with a turnover of more than a billion euro, a decision has been taken for customers with contracts of two years at a fixed price of 80%, not to increase electricity prices by the end.

“20% of stock-linked customers have felt price increases. First of all, we have tried very hard, especially in the business customer segment, to switch these electricity contracts from the exchange price to the fixed price in the summer. Secondly, since the beginning of Covid-19, we have not been charging late payments to the bill for nearly two years. On the other hand, if a customer is experiencing serious problems, we will consider each case on an individual basis. Of course, we expect spring to bring in small adjustments in price,” Vancāns said.

 

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