In July this year, the average price of electricity Nord Pool stock exchanges in the Latvian price zone were 31.80 Eur / MWh. Compared to June, it is 17.7% lower and at the same time it is the historically lowest stock exchange price in July, since Nord Pool launch of the stock exchange in 2013, reports the Public Utilities Commission (PUC).
Meanwhile, the average electricity price for households in the 1st quarter of this year reached 56.25 Eur / MWh, which is 43.5% or 24.45 Eur / MWh more expensive than the current stock exchange price. The average price for households is significantly higher than the stock exchange price, as the majority of households (approximately 55.21%) have concluded fixed price agreements with electricity traders or purchase electricity at the price of universal service (32.98%).
A similar situation was observed in neighboring countries. In Lithuania, the electricity exchange price decreased to 31.70 Eur / MWh in July, while in Estonia – 30.10 Eur / MWh. Compared to July of the previous year, in July this year the price was about 35% lower for Latvian and Lithuanian electricity consumers, and even -38% lower for Estonian electricity consumers.
“Most of the household budget for utilities consists of fees for electricity and heat. On average, 35% of the total electricity service bill, which also includes payments for system services and OIK, is the fee for the electricity itself, which depends on the price included in the contract. The user can influence this part of the costs and save accordingly by making a well-considered choice about the offers on the market, »says Jānis Negribs, Head of the Market Surveillance Department of PUC.
PUC reminds that in variable price contracts the price changes according to the price changes on the stock exchange. When choosing a variable electricity price, the user must be prepared to bear the risks of price fluctuations affected by market events. At the same time, however, it is an opportunity to save in cases where the exchange price falls or consumption patterns change, for example by consuming more electricity during the night and on holidays, when the electricity price on the exchange is usually cheaper.
In the case of a fixed price contract, the price of electricity is fixed for a certain period. Thus, its choice provides predictable electricity costs. A fixed price is usually chosen by users who do not want to take the risk of price fluctuations. A fixed price protects in cases when the price on the stock exchange increases, but at the same time does not provide an opportunity to save if the price on the stock exchange decreases, including at night and on holidays.
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