Karins instructs Ministries of Economics and Finance to consider corrections to proposed power transmission and distribution tariffs

RIGA - Prime Minister Krisjanis Karins (New Unity) has issued a resolution instructing the Ministries of Economics and Finance as shareholders to consider corrections to the power transmission and distribution tariffs proposed by Augstsprieguma Tikls and Sadales Tikls, the operators of power transmission and distribution systems, LETA was told at the State Chancellery. 

Karins indicates that electricity costs have a significant effect on economic growth, which is why he has ordered the two ministries to draw up a report to the government on possibilities to make some corrections to the tariff hikes proposed by Augstsprieguma Tikls and Sadales Tikls.

According to the resolution, the ministries are expected to submit the report to the government for a review at the December 20 Cabinet meeting. 

In his resolution, the prime minister suggests a shareholders' decision that would allow Augstsprieguma Tikls and Sadales Tikls to not recover unearned income for the period from 2020 to 2022, as well as an option to fix the electricity price at a certain level. 

While considering the above measures, the ministries have to make sure the possible tariff correction does not affect the two system operators' ability to effectively supply power to the clients. 

As reported, Sadales Tikls plans to increase electricity distribution tariff by 75 percent on the average, the company told LETA.

According to Sadales Tikls, tariff changes will depend on the type of electricity connection and consumption amounts. For instance, for households with electricity consumption of about 100 kilowatt hours (kWh) per month the tariff increase, including the transmission tariff fee that is part of the distribution tariff, by EUR 6 to EUR 8.

The company explains that the planned increase in the electricity distribution tariff is necessary to cover Sadales Tikls costs in the amount of EUR 183 million per annum, caused by the rapid increase in prices of electricity, resources necessary for the maintenance and development of the electricity distribution network.

Meanwhile, the power transmission tariffs of Augstsprieguma Tikls might grow 4.3 to 4.9 times, according to the operator's current proposal.