Liberalized power supplies to Lithuanian residents should not raise prices - energmin

VILNIUS – Lithuania's Energy Ministry plans to liberalize the electricity market for household consumers by 2020 to allow residents to choose a electricity supplier they prefer.

Energy Minister Zygimantas Vaiciunas says that the process will not be sudden and, therefore, should result in higher electricity prices, adding that decisions would be reviewed, should this happen.

"We see the need to scrap regulation of prices for household consumers," the minister said at the parliamentary Energy Commission earlier this week.

"I cannot give a specific date today, as it will depend on the discussion with the market players, but this should become reality by 2020," Vaiciunas told BNS. "If we see that the decision brings more threats than benefits by 2020, we will definitely be able to review the decision."

Meanwhile, MP Linas Balsys, a member of the parliamentary Environment Protection Committee, said that “elimination of regulation of retail prices is a direct path towards higher prices” under monopoly conditions.

"Liberalization would be a normal thing on markets featuring strong competition. However, on a market with no competition and a single company (Energijos Skirstymo Operatorius, ESO) controlling everything, increase of prices is likely," said the MP.

Vaiciunas said that "proper preparations" for changes would help avoid a price hike. In his words, the projected radical change on the market will take place gradually.

"Yes, there were increase of prices in neighboring countries – Estonia and Latvia, we have a good opportunity to learn their lessons and make sure that, first of all, prices for consumers do not go up and secondly this should bring new opportunities, namely for consumers to choose and have an operational system," the minister told BNS.

Scrapping of regulation of electricity prices for consumers by 2020 is part of Lithuania's commitments under the Baltic Energy Market Interconnection Plan (BEMIP).

Full liberalization of the electricity market has been discussed since approximately 2010, with independent suppliers constantly pressing to allow residents choose the provider of electricity.