The Ministry of Economics (MoE) does not agree with the proposal of the Public Utilities Commission (PUC) regarding the participation of the electricity producer in covering the maintenance costs of the electricity network, according to the letter of the ministry to the regulator.
The MoE has evaluated the regulator’s consultation document published in April on the methodology for calculating electricity transmission system service tariffs. The Ministry welcomes the mechanism developed by PUC, which stipulates that the transmission system operator will be able to use congestion revenues in the future to reduce transmission tariffs by investing them in the acquisition or creation of new fixed assets. According to the Ministry, this can be considered a successful solution that will lead to a reduction in long-term capital costs.
The MoE also positively assesses the regulator’s plan to change the approach to setting electricity transmission tariffs from a cost-plus approach to a revenue ceiling approach already applied to the electricity distribution system operator and the natural gas transmission system operator, thus aligning tariff calculation approaches and ensuring tariff stability. for a period of two to five for which the allowable revenue will be determined.
At the same time, the MoE is concerned about the charging model developed by PUC, which envisages dividing the transmission system users into three groups according to the boundary of electrical installations – 110 kilovolt (kV) line user group, 110 kV busbar user group and 110 kV transformer user group.
“Such a division of users does not correspond to the general essence of the transmission system, nor to the historically established Latvian electricity system,” the ministry points out. Also with regard to the PUC methodology proposal that electricity producers should continue to contribute to the maintenance costs of the electricity network, the MoE emphasizes that it cannot support such a proposal, as the Ministry does not have information on the justification of this proposal. “Both European Union and national level policy planning documents envisage the promotion of the use of renewable energy resources. Several tasks of the National Energy and Climate Plan for 2030 also envisage removing barriers to the entry of renewable energy power plants into the electricity market. Therefore, the MoE considers that , it is critical to assess the consequences of such a proposal, including how the specific proposal will affect the competitiveness of local electricity producers in the Baltic region, “says MoE.
In the opinion of the Ministry, this factor is especially important given the close integration of the Baltic electricity market. “Before implementing such a proposal, the MoE calls on the regulator to assess whether the current introduction of an electricity transmission tariff for electricity producers is the right solution by conducting a detailed regional impact assessment, as well as to consider such a solution uniformly in all Baltic countries, thus maintaining equal and fair competition between electricity producers. , “says EM. It has already been reported that JSC Augstsprieguma tīkls, by introducing a fee for the maintenance of capacity for electricity producers, plans to reduce transmission tariffs and raise the fee for the maintenance of transmission capacity from next year.
Representatives of the “high voltage network” told LETA that the changes in the transmission tariff directly affect only those electricity consumers who are connected to the transmission network, while the absolute majority of consumers, including households, could be affected after the distribution network companies review their tariffs. According to the calculations of the “High Voltage Network”, for consumers who are not directly connected to the transmission network, the change in the bill will be up to 1%.
Sandis Jansons, Chairman of the Board of Sadales tīkls, pointed out that the planned changes in the electricity transmission tariffs of the High Voltage Network could be unfavorable for the customers of Sadales tīkls, including both households and small and medium-sized enterprises. Jansons pointed out that the electricity transmission fee applied to the distribution network in the new transmission tariff project will actually increase by 3.6%, which amounts to several million euros per year.
“So far, 25% of the” Distribution Network “tariffs for customers were directly charged to the” High Voltage Network “. If the new transmission tariffs are approved, the tariff will increase even more,” he stressed.
The Minister of Finance Jānis Reirs (JV) pointed out that when changing the electricity tariff methodology, PUC has not assessed the current risks and the situation in the economy. He stated that the provision of safe and high-quality electricity transmission services at the lowest possible tariff is the central task of the capital company, but the regulator has not assessed all risks and the current economic situation, and the new PUC methodology is not sufficiently justified.
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