Riga, 2014-02-26 09:46 CET (GLOBE NEWSWIRE) -- So far, the Public Trader’s obligation to perform mandatory procurement functions has been provided by Latvenergo AS. Once the electricity market is opened completely, the mechanism for restricting the increase of the mandatory procurement component (MPC) is developed and the state budget subsidies are introduced, this will no longer be a valid mechanism.
A separate public limited company must be established so that a state budget subsidy may be used in the open electricity market to cover mandatory procurement expenses, covering part of users’ electricity costs. Because a merchant operating within a competitive market may not receive budget subsidies, this task will no longer be performed by Latvenergo AS but handed over to a newly established subsidiary. The new company will commence operations on 1 April 2014 and take over the mandatory procurement functions currently handled by Latvenergo AS. Registered and paid share capital of EPT is EUR 40,000. In the share capital has been invested cash.
Electricity purchased as part of the mandatory procurement is bought at higher state-mandated tariffs and is sold on the electricity exchange at the market price. The difference between electricity prices and the expenses on ensuring such trading represent the annual expenses that have to be compensated, which determine the amount of the MPC effective from 1 April of each year. In accordance with the applicable legislation, EPT will conduct the mandatory procurement of electricity that will be sold on an exchange. Considering the expenses on the mandatory procurement compensated on a yearly basis and the state budget subsidy, EPT will perform calculations of the MPC each year and submit the figures for approval to the Public Utilities Commission (PUC). The PUC will review the calculations and approve the MPC, which will be included in customers’ invoices for electricity consumed starting from 1 April of each year.
* An electricity trader that has been assigned special duties by the applicable legislation to buy electricity from the generators entitled to state support as regards the generation of electricity from renewable sources and in efficient cogeneration power plants.
Additional information: J?nis Irbe Group Treasurer Phone: +371 67 728 239 E-mail: investor.relations@latvenergo.lv
About Latvenergo
Latvenergo Group is a pan-Baltic energy company, engaging in electricity and thermal energy generation and supply, electricity distribution services and management of transmission system assets. Latvenergo Group holds one-third of the entire Baltic electricity market, thus ensuring its leadership in the Baltic electricity supply. Latvenergo AS has been acknowledged as the most valuable company in Latvia for several years in a row. International credit rating agency Moody’s has assigned Latvenergo AS an investment-grade credit rating of Baa3/stable.
Latvenergo Group includes the parent company Latvenergo AS (electricity and thermal energy generation and supply) and its subsidiaries Latvijas elektriskie t?kli AS (management of transmission system assets), Sadales t?kls AS (electricity distribution), Elektrum Eesti OÜ (electricity supply in Estonia), Elektrum Lietuva UAB (electricity supply in Lithuania) and Liep?jas ener?ija SIA (thermal energy generation and supply, electricity generation), as well as Elektrum Latvija SIA (electricity supply), a subsidiary of Elektrum Eesti OÜ.
