The heating season in 2023/2024 will end with the reduction of heat energy tariffs for 18 merchants in several populated areas. Compared to the end of the previous heating season, this year in May, tariffs will be 22% lower on average – from 110 EUR/MWh a year ago to 86 EUR/MWh at the end of the heating season. The Public Services Regulatory Commission (SPRK) continues to receive new tariff projects for evaluation every week.
“The average thermal energy tariff in Latvia has decreased every month since the end of 2022 and, judging by the tariff projects currently under evaluation, will decrease a little more. From November 2022, when the average thermal energy tariff reached the highest level of 131 EUR/MWh, this May it will have already decreased to 86 EUR/MWh. Despite the decrease in the price of fuel on the market, the changes in tariffs in Latvia are different and end users’ bills arrive with a delay of a few months. This is influenced both by the fuel chosen individually by each merchant, and by the approach to purchasing fuel – by fixing the price or using the stock exchange price,” comments Alda Ozola, chairman of PUK.
For several merchants, the heat energy tariff in May, compared to April of this year, will decrease by as much as 14-26%, taking into account that new contracts for fuel supply have been concluded. Previous contracts for the purchase of fuel were concluded for a longer period of time, often for the entire heating season, as a result of which prices remained unchanged for several months. There are also merchants for whom the changes are not so rapid, considering that they happened gradually already in the previous months.
“Last year, the changing market conditions and the uncertain geopolitical situation forced heat supply merchants to be cautious and conclude long-term fuel supply contracts at a fixed price. When the previous contracts for the supply of fuel expire, new ones are concluded, and this has a significant impact on heat energy tariffs, taking into account the decrease in the price of wood chips and natural gas. At the end of this heating season and thinking about the next one, the challenge for heat supply merchants is to find the most suitable solution for the lowest possible fuel price in the interests of the residents – to buy fuel in short-term transactions or to buy it at once for the whole season, thereby also fixing a guaranteed price,” says A. Ozola.
At the same time, although, thanks to the changes in the price of fuel, heat energy tariffs are currently mostly decreasing, it can be safely predicted that they will no longer be at the same level as, for example, in 2021. The increase in costs can be observed in other costs of merchants in connection with the provision of heat energy supply services. The increase in these costs – wages, repair works, bank loan interest rates, etc. – has an impact on the costs of providing heat energy supply services to merchants as well. In general, compared to previous years, the cost of heat energy production without fuel has slightly increased in all heat energy tariff items.
Known changes in May*
From this year On May 1, the thermal energy tariff will be lower – in Ikškile by 23% (69.47 EUR/MWh), in Dobele, Krimuna and Tērvete by 21% (66.15 EUR/MWh), in Jurmala by 20% (70.99 EUR/MWh) , in Daugavpils by 19% (65.86 EUR/MWh), in Cēsis by 14% (71.12 EUR/MWh), in Aizkraukle and Aizkraukles parish by 8% (59.53 EUR/MWh), in Gulbene by 6% (71, 42 EUR/MWh), in Grobinė, Kapsedė, Cimdenieki and Robežnieki by 4% (93.20 EUR/MWh), in Jēkabpils, Kūka and Spungēni by 4% (58.56 EUR/MWh), in Kocēni by 3% (69.52 EUR/MWh), in Salaspils and Saulkalne by 2% (69.90 EUR/MWh), in Valmiera and Viestura Square by 0.9% (71.92 EUR/MWh).
On the other hand, from this year On May 2, the tariff will decrease in Olaine and Pārolaine by 26% (66.19 EUR/MWh), in Jaunolaine and Stūnīš by 1% (88.03 EUR/MWh), from May 3 – in Talsi by 8% (70.77 EUR/ MWh), from May 4 – in Balvos by 8% (67.56 EUR/MWh), from May 5 – in Brocēni by 0.2% (89.90 EUR/MWh), from May 7 – in Ludza by 3% (75.45 EUR/MWh) and from May 9 – in Ilūkste by 17% (74.85 EUR/MWh).
PUK receives the draft tariffs of thermal energy merchants for evaluation every week, accordingly, changes in tariffs occur regularly – every month throughout the year, and for one merchant, the tariff can change several times a year – either increase or decrease depending on the price of fuel. If the actual price of the new fuel is higher than what was previously included in the applicable tariff, the merchant has the right to set a higher tariff. On the other hand, if the actual fuel price is lower than the previously applied tariff, the merchant is obliged to apply a lower tariff to the users. PUK, evaluating the submitted tariff projects, follows up – if the price of fuel for a merchant is higher than the current market price, then PUK demands an explanation.
Currently (29.04.24) there are 19 complete heat supply tariff projects and four heat supply tariff projects determined by the merchants themselves.
PUC approves tariffs without value added tax.
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About PUC:
The Public Services Regulatory Commission is an independent state institution that monitors the activities of public service providers (around 600 regulated merchants), market development and ensures that citizens receive continuous, safe and high-quality public services at an economically justified price. PUK regulates public services in the fields of energy, water management, electronic communications, post, deposit packaging and household waste management. Wider www.sprk.gov.lv.
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