Minister: planned electricity distribution cost rise must not happen

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The distribution tariff change plan submitted by the State JSC “Sadales tīkls” (ST), which provides for an average increase of 75% from July next year, should be changed, the Minister for Economics Ilze Indriksone (National Alliance) said after meeting with the management of the ST November 23.

According to the plan, the transmission company Augstsprieguma tīkls (AT) is expected to increase the tariff by approximately four times following the project originally submitted, while the ST would be on average 75%. On Wednesday 23 November, the Minister of Economics held negotiations with ST, with the aim of specifically discussing the tariff submitted. The Minister announced after the meeting that the company's draft tariffs should be prepared again.

“We have agreed that this project, in the opinion of the Ministry of Economics and also, in my opinion, must be changed, substantially changed. I would even say that a new proposal should be prepared,” the Minister said.

In assessing the ST tariff project, the Minister said that what is fine at peace times is not fine now. According to Indriksone, this tariff project has come from a methodology that had been in place several years ago, but it is not fit for a time when there is an energy crisis.

Indriksone stated that there are a number of lines in which the ST tariff project can be improved and this needs to be done. The goal is one for all: increasing electricity capacity, improving electricity prices, and replacing fossil fuels with renewable energy sources. Any tariff should follow this headline.

Indriksone said that the draft tariff contains a number of options for improving conditions. For example, extending the tariff period, which could have an impact on the level of the tariff, due to greater stability and less volatility over a larger period. “So that the tariff period is one of the key mechanisms for how this tariff could be reduced,” the minister said.

ST Board Chairman Sandis Jansons said that the company's proposed tariff project, which aims to raise the tariff by an average of 75% from July next year, is a mirror image of the transmission network's tariff, which has been submitted for discussion.

“Do we, the ST, like this proposed tariff project? No, we don't like it. Because it is clear that the green component and the green connection rates for distribution networks must be lower, in line with European standards. But unfortunately, the current transmission tariff forced [us],” said Jansons.

Both the Chairman of the ST Board and the Minister for Economics expressed their readiness to work on the new ST tariff project by negotiating with the transmission network and the Ministry of Finance (FM), which is the holder of the shares of this company.

The Public Utilities Commission (SPRK) issued a statement on Wednesday indicating that both the transmission and distribution rates submitted are currently being evaluated.


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