Latvian Public Utilities Commission (SPRK) has approved new heating energy tariffs for Latvenergo JSC TEC-1 and TEC-2. Tariffs will be significantly above existing ones and will affect tariffs in use by Rīgas siltums JSC.
As reported by SPRK, 88% of heating energy’s tariff costs come from natural gas and because natural gas costs are variable, Latvenergo was asked to set TEC-1 and TEC-2 tariff use order under which tariffs are set in accordance with different natural gas prices.
In the decision approved by SPRK natural gas tariffs are set at an interval between 10 to 225 EUR/MWh without VAT.
Compared to the existing tariff, Latvenergo has set the tariff for heating energy produced at TEC-1 in September will be 53.49 EUR/MWh, whereas for TEC-2 the tariff will be 54.41 EUR/MWh.
Increased heating energy tariff will come to force on 1 October. Tariffs were increased following «increase of prices on fuel (natural gas), increase of costs of emission quotas, a major drop in produced energy, as well as the unexpected costs left from the previous heating season».
«As the war in Ukraine continues, natural gas prices in Europe prices have reached unprecedented levels. Currently the price exceeds 300 EUR/MWh on some days. We in Latvenergo expect the price at 140 EUR/MWh to be average during the heating season as a relatively successful result of natural gas transmission,» comments SPRK chairperson Alda Ozola.
She mentioned that this increase will have a significant impact for residents in Riga. This is why «this winter energy efficiency activities and support measures will play a major role».
According to SPRK, with changes to Latvenergo’s TEC-1 and TEC-2 tariffs, Rīgas siltums JSC plans to review its own tariffs as well. Riga City Council previously explained that people on one side of Daugava River are supplied heating energy by Rīgas siltums and on the other – by Latvenergo.
TEC-1 and TEC-2 supply on average approximately 45% of the heating supplied to Rīgas siltums clients. The rest is produced by Rīgas siltums, which uses natural gas and biomass to produce heating energy. There are also independent heating producers that mainly use wood chips.
Households will receive state aid to their heating bills automatically from 1 October onward.
State aid will reach 50% of the difference between the existing heating energy tariff and previous heating season’s heating tariff threshold – 68 EUR/MWh.
This means that if SPRK or a specific municipality’s approved tariff is 150 EUR/MWh, with state support added the tariff will be 109 EUR/MWh.
Latvenergo submitted tariff projects to SPRK on 17 March. The company submitted additional information, updated documents and corrected tariff projects following the request from SPRK.
SPRK has more than 30 heating energy tariffs in review in Latvia.