Regulator approves new natural gas tariffs

The Public Utilities Commission’s (SPRK) council has approved the new tariffs submitted by Gaso natural gas distribution system operator, said SPRK spokeswoman Ieva Bethere.

The biggest change is the introduction of a fixed payment, which means that households with a low-volume connection are likely to see their bills grow.

She said that compared to the initial plan, the regulator has managed to reduce the average tariff by 16 percent. Compared to the present tariffs, the new costs have been cut by 8 percent or €4.5 million. The new tariffs will come into force as of January 1, 2019.

Starting from January 1, payment for natural gas services will be made up of two parts – fixed cost and variable cost that will depend on the amount of consumed gas. The tariffs have been approved for eight groups of users based on the amount of consumed gas.

The variable part of the tariff has been reduced for all groups of users compared to 2008 tariffs. Payment for consumed gas has been reduced by 48.6 percent for households who use gas for cooking, and by 23.4 percent for households who use gas for heating.

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 in the fixed fee.

Gaso submitted the new tariff project to the regulator in February 2017.

Gaso board chairwoman Ilze Petersone-Godmane said that the new tariffs had been necessary in order to adapt to the current situation in the natural gas market and to ensure the necessary safety standards.

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.

The more than 5,200 kilometers long natural gas distribution network should be gradually renovated, and it requires constant investments.

She also said that the present tariffs do not meet the current market situation requirements. 20,500 customers have very low gas consumption, but their infrastructure should also be renovated and maintained, and these costs are covered by other gas consumers.

Gaso, a subsidiary of Latvijas Gaze, is the only natural gas distribution system operator in Latvia. The company launched operations in December 2017.

Gaso’s share capital is €39.9 million comprised of 39.9 shares with a face value of €1 each.

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