Latvijas Gāze subsidiary proposes fixed fees for gas connections

Latvijas Gaze subsidiary Gaso has submitted its new tariff plan for distribution of natural gas to the Public Utilities Commission, the country's utility watchdog. According to the new plan, natural gas distribution tariffs will be reduced by 18-46% to more than 95% of consumers, the company’s representatives reported.

At the same time, there will be a fixed fee for natural gas connection, depending on the connection capacity.

"The proposed tariff plan is a carefully weighed step that should be made to adapt to the new situation in the natural gas market and to ensure the necessary safety standards. Safety of natural gas infrastructure refers to all consumers, therefore the natural gas distribution network should be maintained and renovated," said Gaso board chairwoman Ilze Petersone-Godmane.

She said that the main and local gas distribution pipelines initially had been projected for larger capacities, while natural gas consumption has decreased in the past years. Some customers have gas connection capacities that are not used, therefore they should be revised and made efficient.

90% of the costs in the gas distribution system are fixed and do not depend by the amount of consumed gas – the system has to be maintained, renewed, the necessary safety measures have to be taken irrespective of amount of gas consumption. The old tariffs, however, depend mostly on the amount of gas consumption, thus, posing serious threat to stable and secure maintenance of the system, Petersone-Godmane claimed. 

In line with the new tariff plan, customers who consume natural gas up to 6 m3 per hour will have a fixed fee at €1.77 per month, customers consuming 6-10 m3 per hour will have to pay €6.63 per month, and customer consuming 10-16 m3 per hour will have to pay €10.6 a month in the fixed fee.

Larger customers with a consumption of more than 16 m3 per hour will have a fixed payment calculated per unit of allowed capacity.

As reported, Gaso started operations on December 1, 2017.

According to the European Union directives and the Energy Law, Latvijas Gaze had to separate natural gas distribution and transmission systems by January 1, 2018. The natural gas transmission and storage functions were separated from Latvijas Gaze by the establishment of Conexus Baltic Grid in 2016, a company that is independent from Latvijas Gaze. On the other hand, natural gas distribution operator may be a subsidiary of Latvijas Gaze.

The company’s board chairwoman is Ilze Petersone-Godmane, and other board members are Anton Bubenov, Joachim Hockertz, Baiba Bebre and Aleksandrs Koposovs.

Last year, Petersone-Godmane, then State Secretary at the Interior Ministry, was refused access to state secrets and has since moved to the private sector. 

LTV suggested the official had been denied security clearance due to her close friendship with former KGB officer and businessman Juris Savickis, the head of Itera Latvija energy company. Itera owns 16% of Latvijas Gāze shares, according to the Latvijas Gāze website.

Gaso’s share capital is €39.9 million. 

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