Increased heating costs likely in autumn for Rīga, potentially soaring by 22%
**Latvia's Proposed Heat Energy Tariff Increase: What You Need to Know**
A proposed increase in heat energy tariffs in Latvia, particularly in Rīga, has been announced by the heating utility company Rīgas siltums. The new tariff, if approved, will take effect in September this year.
1. **Tariff Proposal by Rīgas siltums:** The company has submitted a draft tariff of EUR 88.10 per megawatt-hour (MWh), excluding value-added tax, and an additional EUR 2.05 per MWh for a contingency/revenue smoothing component. This totals EUR 90.15 per MWh, a significant increase from the current tariff of EUR 77.77 per MWh[1][2].
2. **Latvenergo's Stability:** Despite the increase proposed by Rīgas siltums, Latvenergo's heat production tariffs remain unchanged from the previous heating season, raising questions about the justification for the tariff increase proposed by Rīgas siltums[1].
3. **Rising Natural Gas Prices:** The increasing cost of natural gas over the past year has contributed to the overall increase in heating tariffs. This increase affects the cost of producing and distributing heat energy[2].
## Impact on Monthly Costs for a Two-Room Apartment
The projected increase in heating tariffs is expected to affect customers differently based on their building conditions:
- **Renovated or New Buildings:** For a two-bedroom apartment in a renovated or new building, the monthly heating cost is expected to rise by approximately EUR 10, from EUR 45 to EUR 55[2].
- **Unrenovated Buildings:** In unrenovated buildings with higher heating losses, the monthly cost could increase by around EUR 15 to EUR 20, moving from EUR 70 to EUR 85-90, depending on the building's condition and outside temperatures[2].
The new tariff, taking into account the increase in natural gas prices over the last year, will result in a price of EUR 90.15 per MWh for customers (this fact was mentioned earlier). Rīgas siltums anticipates a price increase for heat energy in the next heating season of approximately 22% (this fact was mentioned earlier).
In June 2022, the price for heat energy produced by Latvenergo's TEC-1 plant was 76.51 euros per MWh, and for the TEC-2 plant - 79.75 euros per MWh[3]. The proposed heat energy tariff, excluding value added tax, is EUR 88.10 per MWh[1]. A contingency/income equalisation component of EUR 2.05 per MWh is to be added to the proposed tariff[2].
The price of heat energy produced by Latvenergo was 55 euros per MWh in the summer of 2024 when the current tariff was developed[4]. The new tariff is expected to come into force in September this year, gradually starting with the heating season.
[1] https://www.sprk.gov.lv/lv/news/2022/04/27/riga-siltums-par-nozaru-siltumu-tarifu-2022-2023-godu [2] https://www.delfi.lv/news/riga/riga-siltums-par-nozaru-siltumu-tarifu-2022-2023-godu.d?id=91773315 [3] https://www.sprk.gov.lv/lv/news/2022/06/09/siltumu-tarifu-projekts-par-latvenergo-tec-1-un-tec-2-plani [4] https://www.sprk.gov.lv/lv/news/2022/04/27/riga-siltums-par-nozaru-siltumu-tarifu-2022-2023-godu
- Financial Implications for consumers: With the proposed increase in heat energy tariffs by Rīgas siltums, customers of a two-bedroom apartment in renovated or new buildings can expect an additional EUR 10 per month, while those in unrenovated buildings may see an increase of around EUR 15 to EUR 20.
- Industry Impact: Financing the Future The proposed heat energy tariff hike by Rīgas siltums comes amidst escalating natural gas prices, challenging the energy sector's financial stability, particularly for providers such as Latvenergo.
