AS “Augstsprieguma tīkls” (AST) has proposed to increase transmission and capacity tariffs for customers of AS “Sadales tīkls” more than doubling the total increase in transmission tariffs, informs the chairman of the board of directors of “Sadales tīkls Sandis Jansons.
“It is understandable that the electricity price increase and general inflation affect the operating costs of both the electricity transmission operator and the distribution operator, so the question of the tariff increase was just a question of time,” Jansons said.
He also pointed out that the electricity supply system operators have managed to postpone this switchover longer than, for example, the heat or gas supply sector. The distribution tariff has not increased since 2016, and in 2020 it was further reduced by an average of 5.5%, while at the moment the cost increase no longer allows to provide a high quality and safe service within the existing revenues .
Jansons said that the tariff cost project presented by AST will be assessed by the Public Utilities Regulatory Commission (SPRK), but it is clear that it will have a significant impact on the customers of “Sadales netas” because the broadcasting service compensates about a third of the overall costs of the electricity distribution service. Furthermore, in AST’s new tariff project, the higher cost burden is borne directly by the “Distribution Network” and its customers.
“AST’s proposed increase in the electricity transmission tariff by almost 400% and the electricity tariff increase by around 50% for the customers of “Sadales tīkls” represents a total increase in the tariffs of transmission rate of more than 100%,” said Jansons, adding that “Sadales tīkls”, who assess the transmission tariff, invites the PUK to consider both how it affects the promotion of green energy production in the transmission system and the whole system of energy supply as a whole.
Last year, the costs of “Sadales netas” for the electricity transmission service were approximately 70 million euros and, with the introduction of the new electricity transmission tariff, will amount to approximately 145 million euros the year. Consequently, this increase will affect the final cost for distribution customers.
On average, the cost of the electricity distribution service for the customer could increase by about a third as a result of the increase in the transmission tariff, but it is also affected by the specific tariff plan, explained the company.
The head of “Sadales net” explained that the government can currently reduce the impact of such a potential increase in the transmission tariff with decisions on support for households and businesses, including, for example, the already valid decision on a tariff discount of distribution for companies until 30 April 2023.
Jansons welcomed the PUK’s proposal to apply the new transmission tariff only from 1 July 2023, as it would allow the structure of transmission and distribution tariffs to be harmonized from 1 July, giving customers the opportunity to prepare for the changes transmission tariffs in a more timely manner.
“Sadales tīkls” is currently working on the calculations to evaluate the cost impact of the new transmission tariff on the distribution tariff, and consequently a new tariff project.
At the end of September, taking into account the growing costs, as a result of which the company is already operating at a loss, “Sadales tīkls” submitted the first version of the tariff correction to PUK. The company is currently awaiting the evaluation of the commission in order to improve it if necessary. According to the procedure, information on the calculation of the tariff volume will be published one month before the entry into force of the new tariff.
It has already been announced that on 15 October AST presented the draft tariff for the electricity transmission service to the PUK.
The project stipulates that the electricity transmission tariff of the line is 0.00741 euros per kilowatt hour (kWh) for users whose possession limit of electrical equipment is 110 kilovolts (kV), i.e. 4.3 times higher than the current one. The fee for maintaining transmission capacity for these users will instead be 13,288 euros per kilowatt (kW) per year, 47% more than at present.
For users whose electric equipment ownership limit is 110 kV bus, the electricity transmission tariff is set at EUR 0.00891 per kWh, an increase of nearly 4.5 times, but the tariff for maintaining transmission capacity for these users will be EUR 15.115 per kW per year, which is an increase of 50%.
Instead, the electricity transmission tariff will be 0.01119 euros per kWh, or 387% more than the current one, for users whose electrical equipment ownership limit is on the 06-20 kV side of the transformer 110/6-20 kV. For these users, a 51% increase in the transmission capacity maintenance fee is envisaged, up to €16,608 per kW/year.
The project also foresees that the capacity charge for electricity producers connected to the transmission system will decrease by 11% – to 0.81302 euro per kW per year.
AST proposes that the tariffs could enter into force from 1 March 2023, but PUK indicated that the new AST transmission and distribution “Distribution network” tariffs should enter into force no earlier than 1 July of the following year.
AST is an independent operator of the Latvian electricity transmission system, which ensures the operation of the electricity transmission network and the security of electricity supply of the Latvian electricity system, provides transmission system services on the basis of published transmission service tariffs, performs the operational management of the transmission grid system, and ensures the safe and stable transmission of electric power in the transmission system. AST is owned by the state. The company’s bonds are listed on the “Nasdag Riga” debt securities list.
AST is the largest shareholder of the unified operator of the natural gas transportation and storage system AS “Conexus Baltic Grid” (“Conexus”) – the company owns 68.46% of the shares “Conexus”.
“Sadales tīkls”, on the other hand, is part of the state-owned company “Latvenergo”, which is responsible for the maintenance and development of the electricity grid in Latvia. The company provides management, renewal and planned development of distribution networks, electricity consumption monitoring, loss reduction measures and electricity accounting, as well as establishment of new connections.
