Saeima will have to decide on date for liquidating MPC – economics minister

RIGA – The Economics Ministry will complete the task given by Saeima and will submit proposals on scraping the mandatory procurement component (MPC) on electricity until March 31, but the decision on the date will have to be made by the Saeima, said Economics Minister Ralfs Nemiro (KPV LV).

The minister told LETA that the Economics Ministry is working on solutions for scrapping MPC and is preparing a report on the control measures. Also, an agreement has been signed with sworn lawyers’ office Ellex Klavins on the legal aspects of the procedure. The ministry is working on regulations and their annotations to be submitted to the Cabinet of Ministers.

“The Economics Ministry is preparing regulations on scrapping MPC from March 31. We can do it, but there is a questions about consequences. The ministry is a state institution, it should act responsibly, therefore we will point at legal risks and other aspects, including budget, foreign policy, domestic policy energy security, etc.,” the minister said.

The ministry is also estimating costs of the procedure, based on information from Latvenergo power company, the Finance Ministry and other institutions.

As reported, the Economics Ministry has asked the parties concerned to provide their opinion about the proposal to scrap the MPC as of March 2019. The Public Utilities Commission has been asked to give its opinion about the plan’s impact on heating tariffs in Latvia’s municipalities. Augstsprieguma Tikls power transmission operator has been asked about the plan’s impact on the electric power system’s stability and electricity prices, and the Latvian Renewable Energy Federation has been asked about its impact on the generation of renewable energy in Latvia.

The other authorities asked to provide their opinion about the planned abolition of the MPC system include farmers’ organizations, the Agriculture Ministry, the Environmental Protection and Regional Development Ministry, the Finance Latvia Association, the Finance Ministry, Latvenergo power utility and the European Commission.

The Economics Ministry will use these opinions to draft regulations for phasing out the MPC system and a provisional impact assessment.

The declaration of the Krisjanis Karins-led government includes a commitment to phasing out the MPC system in a legally acceptable and financially feasible way. The government has also committed to assessing the lawfulness of the system’s creation.

At the beginning of January, Saeima passed a resolution calling on the Economics Ministry to provide the legislation necessary to abolish the MPC already by March 31, 2019.