PUC: According to the “Gaso” tariff project, the natural gas bill for households with low consumption could increase by 1.33 euros per month – Sectors – Financenet

On the other hand, for households that use gas for heating, the bill could decrease by an average of 0.28 euros per month.

Jakobsone emphasized that the impact on users ‘bills from changes in the distribution tariff will be different, depending on users’ consumption habits. The bill is expected to decrease for households that use gas for heating and consume relatively more – starting from 1332 kilowatt hours (kWh) of natural gas per month. The average natural gas consumption in Latvia for users who use gas for heating is 1781 kWh per month.

She also pointed out that the draft tariff calculated and submitted by Gaso could be changed during the assessment. Currently, PUC has started evaluating the draft tariff. This means that the initial offer of the merchant may differ from the tariff, which PUC will decide after the evaluation of the costs included in the draft tariff.

Jakobsone stated that according to the data of the Central Statistical Bureau (CSB) – the largest part of the household budget consists of fees for heat (3.9%) and electricity (3.2%), but less – for natural gas (0.9%).

Taking into account that this summer natural gas prices have reached the lowest level since the opening of the natural gas market in 2017, it has significantly reduced both the final natural gas tariff and heat energy tariffs in many places in Latvia. Consequently, changes in the natural gas distribution tariff will have a smaller impact on total household gas payments.

For households with average consumption of gas for heating, 39% of the bill is for distribution service and 61% for natural gas (including transmission fee and excise duty). In turn, for households that use gas for cooking, the distribution service makes up 74%, but the fee for natural gas – 26%.

As reported, in early September, Gaso PUC submitted a new draft tariff for natural gas distribution system services, which envisages a small increase in tariffs for low-consumption connections, representatives of Gaso informed LETA.

The draft tariff envisages a small increase of the fixed fee by 5% for the users of the second to the eighth tariff group, at the same time the natural gas distribution tariff for the users of these tariff groups will be reduced by 4% to 30%. The increase in both the fixed and variable components is intended only for small connections, which consume little consumption, but also for these connections the infrastructure must be renewed and constantly maintained.

For “zero” and low-consumption connections, including households that use natural gas only for cooking, the share of the fixed tariff will increase by 0.73 euros. In the year as a whole, gas stove owners have to reckon with an increase in average costs by 13.4 euros, but in other tariff groups, along with the new distribution system service tariff project, the average annual payment will decrease. For most natural gas customers, the variable component of distribution will be reduced by 4% to 30%. For example, the average reduction will be 7% for the second group of consumers and 30% for the eighth group.

The new draft tariff has been prepared and submitted in implementation of the conditions set by PUC, that within two years the Gaso Commission must again provide all the necessary information on the operation and costs of the system. In the distribution system, more than 90% of the costs are fixed and do not depend on the amount of natural gas consumed, as the maintenance, renewal and necessary security measures must be ensured regardless of the consumption. In order to guarantee security of gas supply, the more than 5,300-kilometer natural gas distribution network needs to be gradually upgraded through regular investments.

In 2020, Gaso plans to invest approximately 11 million euros to provide and improve distribution system services, and an equivalent amount of investment is planned both in 2021 and over the next four years. Every year, the company builds about 25 kilometers of new infrastructure, which creates opportunities to attract new users in both the private and industrial sectors.

Gaso is a subsidiary of JSC Latvijas gāze. The company is the only natural gas distribution system operator in Latvia. The company provides security of natural gas networks, technical services and accounting of natural gas consumption. Gaso started operations in December 2017.

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