The Saeima faction of the party “New Unity” has prepared a draft amendment to the Energy Law to introduce a regulated tariff for independent heat energy producers in Riga, as this is expected to help reduce the heat tariff. This is indicated by a post on social network X by Saeima deputy Andris Kulbergs (United List), where he adds that he agrees this could achieve partial improvements. None of the politicians, however, have added that such a provision in the Energy Law was in force until a year and a half ago, but these same deputies, led by Kulbergs, revoked it. It should be added that, although the provision was in the law, it was not observed.
Kristaps Ločmelis, Head of Regulation at Latvenergo, has repeatedly emphasized that it was the obligation of everyone, including private producers, to approve the tariff with the Public Utilities Commission (SPRK), yet producers, except Juglas Jauda, ignored this for years. That is only partially true.
The obligation for boiler houses to have their heat tariff approved was introduced from 1 October 2022 and was binding for only a year and a half (until July 2024). It was introduced temporarily because, due to the war in Ukraine, the gas price increased and Latvenergo was selling heat at a high price. No specific term was set in the law, however, and in theory the regulation could have remained in place.
Private boiler houses kept drafting and redrafting their tariffs, but never actually got them approved. SPRK explains that during the said period heat energy producers submitted tariff projects and SPRK evaluated them, also requesting additional information. However, in most cases the tariff projects did not reach the approval stage because businesses requested deadline extensions or did not provide all the necessary information, and at the same time discussions on repealing the provision were taking place.
It is not entirely clear where these discussions took place, but not in the Saeima. In the Saeima, the Energy Law was open and the proposal of the responsible committee (No. 38) to remove from the law the obligation to coordinate the tariff with SPRK went through without debate, without any objections or discussions. According to the available transcript, the rapporteur for these amendments to the law was deputy Andris Kulbergs, who described this proposal as a mere correction, and no deputy objected. Ironically, the rapporteur even managed at the beginning of the item’s consideration to reproach the responsible committee for wasting deputies’ valuable time by unnecessarily examining legal errors and defects. This happened on 25 April 2024, when, without objecting to the proposal, the deputies supported the offer to delete paragraph 1.1 of Article 49 from the law.
Accordingly, woodchip boiler houses were required to have their tariff approved, but in a year and a half they did not do this, and afterwards Saeima deputies repealed this provision.
If woodchip boiler houses still had to coordinate their tariff with SPRK, it would most likely now be around 55 euros – similar to the price of Rīgas Bioenerģija, the municipal company operating on the left bank of the Daugava.
Among independent heat energy producers in Riga, tariff projects are currently approved by SPRK for Latvenergo TEC-1 and TEC-2, as well as Juglas Jauda, because historically these businesses have received state support for electricity produced in cogeneration. By the way, some companies are still receiving OIK support. Of those operating in Riga’s heat energy market, there are three: Latvenergo, Juglas Jauda and Gren.
Read the full article on the heat procurement procedure on the right bank of the Daugava in Riga in the first issue of Inc. magazine – in stores in just a few days. Subscribe today and receive the magazine by post.
Originally published at https://inc-baltics.com/regulets-tarifs-neatkarigajiem-siltuma-razotajiem-bija-tacu-deputati-so-normu-atcela-ka-nebutisku/
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