Enefit gaining Latvian customers

  • 2011-03-09
  • From wire reports

LOOK NORTH: Nils Usakovs is considering changing electricity suppliers for the city of Riga.

RIGA - Riga Mayor Nils Usakovs (Harmony Center) on March 3 had a meeting with representatives from Enefit, the Latvian subsidiary of Estonian power utility Eesti Energia, to discuss their forecasted tariffs that they might offer for municipal enterprises and organizations in Riga, reports news agency LETA. Rigas Centraltirgus (Riga Central Market) has been buying electricity from Enefit already since last year, as Enefit had offered 10 percent lower tariffs than the other bidders.
Enefit could also participate in procurement tenders organized by other municipal companies and organizations, Usakovs’ press secretary Anna Kononova said.

It is possible that Enefit could offer its services to not only enterprises and organizations, but also households, for instance, via the municipal house management company Rigas Namu Parvaldnieks.
Additionally, about 2 million lats (2.8 million euros) are spent on street lighting in Riga each year. With the new tariffs from the Latvian power utility Latvenergo, this sum will increase by about 45 percent, which is why a new tender will be announced soon by the Riga street lighting agency Rigas Gaisma.

Latvia’s Public Utilities Commission council approved new electricity tariffs for Latvenergo last month, which provide a new system of calculating tariffs. The new tariffs from Latvenergo are approximately 30 percent higher and will come into force as of April 1.
Because of the upcoming higher electricity rates, increasingly more residents of Latvia are looking to Enefit as their power supplier, reported business daily Dienas Bizness. Usakovs is therefore also interested in looking for an alternative to Latvenergo.

“Each day we receive from fifty to a hundred calls from households inquiring about the opportunity to switch to a different supplier. We are unable to answer all calls, which is why we now offer an inquiry form on our Web site. We are also receiving calls from enterprises - on Feb. 21, 35 new companies had registered with our Web site and 15 had gotten in touch with us on the phone,” says Enefit Executive Director Janis Bethers.

Enefit says it promises that companies that choose to enter into agreement with them, according to the company’s current electricity tariffs, will save 4 to 6 percent, depending on consumption figures and type of supply. If the price of electricity for clients is not pegged to the wholesale price, the saving is not fixed either, but, judging from the wholesale prices of 2010, the difference reached up to 30 percent in the spring, said Bethers.
He notes that there are no restrictions as to how many clients Enefit can have in Latvia, however, the situation is different for households, because Sadales Tikls electricity distribution network operator does not have an automated data exchange system.

This, though, is refuted by Latvenergo spokesman Andris Siksnis, who notes that already from 2008, not a single apartment in Latvia is restricted in choosing an electricity supplier.
The Economy Ministry’s Parliamentary Secretary Klavs Olsteins (Unity) explained in February on ‘Labrit, Latvija!’ that the electricity rates must be raised because Latvenergo is in need of significant investments. He warned that if there are no investments in power infrastructure, then this winter’s situation in Latgale Province can recur, but this time already on a nationwide scale.

The decision to raise electricity rates was “absolutely wrong,” said Auditor General Inguna Sudraba on Feb. 23 on the same Latvian State Television (LTV) news program. “This is a path to poverty, not economic growth,” said Sudraba.
She emphasized that this decision should not have been made now, when it is necessary to support economic activity and residents’ initiatives. The increase of rates for one of the basic services will have a negative impact on Latvia’s economy and individual residents’ initiatives.

Olsteins emphasized that even after the hike in Latvenergo tariffs, they will remain fourth or fifth lowest in the European Union.