Latvian transmission system operator JSC "Augstsprieguma tikls" (AST) has submitted for approval the revised electricity transmission tariff to the Public Utilities Commission (PUC). The new amendments to the transmission tariff calculation methodology initiated by AST and approved by PUC allows to include the inflation forecast for 2024 in the tariff and to allocate AST's income from international transmission capacity auctions  for reduction of the tariff, as a result of which it is possible to reduce the costs included in the tariff by 2.4 million euros.

"We are pleased that, in cooperation with PUC in a short amount of time, we have managed to find a solution for the improvement of the electricity transmission tariff calculation methodology, which, in addition to previous cost reduction measures carried out by AST, allows to include the current inflation forecast for the next year in the tariff and to direct our additional revenues from international transmission capacity auctions for covering the costs arising from  the provision of the transmission system service, leaving a positive effect on the distribution tariff, the electricity bills of residents and businesses," says Imants Zviedris, Member of the board of AST.

As previously reported, an economically justified electricity transmission tariff with a 30% increase came into force on July 1st, 2023. The transmission system operator, in addition to the already implemented optimization measures, which made it possible to reduce the costs included in the tariff by 58 million euros, in 2024 will decrease the costs included in the tariff by another 2.4 million euros. According to the ASTs' submitted electricity transmission tariff, the revised tariff consisting of two components – cost for electricity transmission and capacity maintenance, will be 2.5% lower than the current tariff. These changes are planned to take effect from January 1st, 2024.

Until the end of 2025, AST will direct the revenues obtained from the interstate transmission capacity auctions in the amount of 62 million euros to cover the costs of electricity transmission system services. As is known, the rapid rise in energy resource prices and inflation significantly affected the costs of electricity transmission service. AST's losses from electricity transmission in 2022 reached 32 million euros, which to reduce the burden on consumers, was covered by using the revenues obtained from auctions of interstate transmission capacity. In the first half of 2023, the price of electricity for transmission losses exceeded the price included in the calculation of transmission tariff 2.9 times. In order to cover the increase in costs, the revenues obtained from auctions of interstate transmission capacities in the amount of EUR 12.5 million were diverted.

Simultaneously AST continues the development of the electricity transmission system and preparation for synchronous operation with continental Europe in the beginning of 2025, to implement the disconnection of the Latvian electricity supply system from the network controlled by Russia and Belarus ensuring the energy security of our country, implementing majority of the projects with the co-financing from the European Union in the amount of 300 million euro. The electricity transmission tariff in Latvia maintains the position of the most competitive tariff in the Baltics, thanks to such measures as the co-financing of the European Union for the development of the transmission network infrastructure, efficiency improvement measures taken by the company and amendments to the electricity transmission tariff calculation methodology.