“We have found solutions to cancel the mandatory procurement component for all users while improving the existing support system. The termination of the mandatory procurement system for electricity is not possible, but it is possible that the costs of mandatory procurement support can be covered by the state in order to have zero in the mandatory procurement component items in the bills of electricity users until the end of 2025. In addition, amendments will be made to the legislation, so that electricity end users do not make any MP payments after 2025,” the Minister of Economics Ilze Indriksone emphasises.

At the same time, forecasting that the average wholesale electricity prices will remain high in the coming months, having a negative impact on the economic situation of households, the decision on increased support for protected users already adopted last year will be extended for four months,” the Minister says.

At its meeting of September 30 this year the Cabinet of Ministers examined the Conceptual report prepared by the Ministry of Economics “Package measures to address the problem of the mandatory procurement component and the development of the electricity market”, and the government conceptually supported the proposal of the Ministry of Economics that from 1 September 2022 to 31 December 2025 the average rate of the mandatory electricity procurement component (hereinafter referred to as MPC) will be 0 euro/MWh, covering the costs of the mandatory procurement support from the dividend income of AS “Latvenergo”. At the same time, the government instructed the Ministry of Economics to develop amendments to the Electricity Market Law by proposing a solution within which the costs of mandatory procurement will not be covered by electricity end-users in Latvia until 2025 or later.

In the first half of 2022, the number of recipients of mandatory procurement state aid decreased significantly. According to data from the State Construction Control Bureau on the validity periods of mandatory procurement permits, the number of cogeneration plants receiving MP aid will gradually continue to decrease further, thus reducing the total costs of mandatory procurement.

At the same time, a source of funding was found and the government agreed conceptually to extend for four months, i.e. until 30 April 2023, increased support to all protected user groups, including large families, low-income households and others, which already has been in force since November 2021.

As is known, taking into account the high increase in electricity price and the proportionality of the amount of support to date, last weekend the government decided to provide the following support for electricity settlements from 1 November 2021 to 31 December 2022:

  • for a poor or low-income household (person) – EUR 15;
  • for a family (person) with a disabled child – EUR 15;
  • for a person with disability group I or his or her guardian – EUR 15;
  • for a large family – EUR 20.