Electricity to become cheaper - Economics Minister

If reforms on the electricity market are successful, electricity bills will decrease for Latvia's residents in the medium term, Economics Minister Arvilis Aseradens (Unity) told LETA Wednesday.

Augusts Brigmanis, chairman of the Greens/Farmers Saeima group, earlier said that many businessmen, including farmers, are appalled at how much their electricity bills have increased recently.

Aseradens claimed that the increase in electricity bills was justified, taking into consideration that infrastructure of the distribution company Sadales Tikls was not being used efficiently.

"In the past, any consumer could apply for such connection capacity that he or she could possibly need in the future. Now we see, however, that many companies - and residents also - consume about 8% to 20% of the capacity they applied for," said Aseradens.

"The entire distribution network is worth approximately €3b and Sadales Tikls has to maintain the network, which is why we want to achieve that people consume as much electricity as they actually need. It is for this reason that Sadales Tikls offered a new system of electricity fees, where the flat rate was increased, while the variable rate, charged for electricity supply, was reduced. This should prompt consumers to consider what connection capacity they actually need," explained the minister.

According to Aseradens, Latvia's electricity distribution system will be modified to support households and large manufacturers.

"At any rate, making the distribution network more effective can achieve very much. If the plan is successful, electricity rates will decrease in the medium term, not increase."

On August 1 Latvia added a fixed fee component to its electricity tariffs. 

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