AST Published The Consolidated Financial Statement of The Group For The 1st Quarter of 2022


The Latvian transmission system operator AS Augstsprieguma tīkls (AST) ended 1st quarter of 2022 with a loss of 3.55 million EUR, resulting from the increase in the price for electricity, since the average price of electricity in the 1st quater was higher by 238% than current tariff. Augstsprieguma tīkls Group revenue in the first 3 months of 2022 was 51.75 million EUR, from which profit - 1.89 million EUR.

AST's net turnover for the reporting period is 35.97 million EUR, including revenue from electricity transmission network services 19.12 million EUR, which accounts for 53% of the total net turnover of the segment. Revenue growth by 41% in the 1st quater of 2022 when compared to the corresponding period of the previous year is related to the revenue from balancing electricity. This revenue covers the costs related to providing system balancing.

In May 2021, a sharp rise in the price of electricity began, which has continued in the first 3 months of 2022. In March 2022, the average price of electricity in the Latvian trade area increased to 167.22 EUR per megawatt hour, which is 59.7% more than in February, but compared to March 2021, it is 284% higher. In March, after a modest decline in the first two months of the year the price of electricity increased also in Europe, mostly exceeding their all-time highest level seen in December 2021, in turn prices in the Baltic States and interconnected trading areas - Poland, Sweden's 4th trading area and Finland - rose more moderately not exceeding last December's anti-record.

The sharp rise in the price of electricity is having a negative effect on AST's financial results, as the costs associated with the provision of electricity transmission services have risen significantly. As the current tariff for electricity transmission services, which was approved in November 2020, does not cover the increase in these costs, in the first quarter of 2022 the electricity transmission segment operated with a loss of 3.55 million EUR.

According to the Article 5 of the Energy Law, electricity transmission is a regulated sector in which the Public Utilities Commission (PUC) determines the permitted profit by setting the rate of return on capital and approving the tariffs for electricity transmission system services.

According to the current methodology for Calculating Tariffs for Electricity Transmission System Services, fluctuations in the price of electricity and the economic effect caused by it are taken into account in the next regulatory period, thus ensuring the financial stability of the operator in the medium term.

In addition, in order to minimize the burden of the increase in the price of electricity on the transmission tariff, AST has encouraged the PUC to use the accumulated revenue from congestion charges to cover the costs.