PM given a month to report on energy sector controversy

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The Latvian parliament or Saeima on June 20 gave Prime Minister Maris Kucinskis (Greens and Farmers Union) a month to prepare a list of officials responsible for introduction of the flawed green energy subsidy system and the so-called Mandatory Purchase Component (MPC) of electricity bills.

Acting on a proposal from the opposition Latvian Alliance of Regions, the parliament told the prime minister to produce a report about the history of the MPC system since its introduction in 2007 complete with the dates and the names of the officials who took decisions and issued licenses to the renewable energy producers benefiting from the scheme.

The parliament said it had made the decision for transparency purposes to provide the public with the chronology of the introduction of the MPC system and the list of officials responsible for taking the related decisions.

The ruling coalition parties have already supported a proposal on setting up a working group that will have to prepare an action plan for liquidation of the MPC system by August 1. The task force announced on June 18 that it had come up with 15 potential instruments for scrapping the MPC system. Those instruments will be analyzed to find the best solution for abolishing the MPC system while limiting the risk of subsequent litigation.

The Cabinet of Ministers has approved the Economics Ministry's proposals for tightening oversight of the energy producers to prevent any future MPC-related fraud.

Following allegations of possible fraud at several cogeneration plants licensed under the scheme, the Economics Ministry conducted inspections at several companies and found that they were not generating any power despite receiving subsidies. It is suspected the power plants had been turned on just for the necessary 72-hour test period to get their MPC licenses approved and then swicthed off again. The Latvian Economics Ministry so far has annulled licenses to a total of 21 heat-and power (cogeneration) plants, though as recently reported by LSM the majority of the plant owners are appealing the decision.

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