ERRA chairmen's session: Current and relevant regulatory issues at energy sector in Latvia. Public Utilities Commission's Chairman Valdis Lokenbahs prezentation

1. 1
ERRA Chairmen’s Session: Current
and Relevant Regulatory Issues
in ERRA Member Countries
October 7, 2015
Bucharest, Romania
Valdis Lokenbahs
Public Utilities Commission of Latvia,
Chairman

2. 2
Regulatory issues in 2015
NATURAL GAS
• Steadily falling natural gas consumption (-11% y/y)
• First commercial flows of natural gas from Lithuania
to Estonia, circumventing underground gas storage
• Approved rules of use of natural gas transmission
network and underground gas storage by third
parties
• Regional harmonization of natural gas quality
requirements under way
• Study of regional natural gas market development
model is being carried out by Frontier Economics

3. 3
ELECTRICITY – REMIT implementation
• CEREMP register live for Latvian MP active from
March 17, 2015
• Registration of power market participants:
• Invitation letter sent to MP
• 11 MP registered today, including TSO
• Transaction reporting pursuant to Implementing Acts:
•Standard contracts: October 7, 2015
•Non-standard contracts: April 7, 2016
Regulatory issues in 2015

4. 4
ELECTRICITY - retail market in Latvia
100%
market
opening
January 1, 2015
Regulatory issues in 2015

5. 5
• Introduced centric model – one bill to household
customer
• Universal service – fixed price offer for one year
• Last resort supply provider is DSO based on
competitive bid
• Introduced protection mechanism of vulnerable
customers
• Communication campaign – regional scope November
2014, 8 events
Regulatory issues in 2015
ELECTRICITY - retail market in Latvia

6. 6
• 13 traders active in a retail market
• 5 traders are active in household segment
• Successfully implemented trade platform/data sharing
system designed and implemented by DSO
• Easy switching via DSO trade platform
Regulatory issues in 2015
ELECTRICITY - retail market in Latvia

7. 7
Expected major developments in the regulated
industries and regulatory challenges in 2016
NATURAL GAS
• Amendments to the Energy law, defining market
opening and unbundling of the vertically integrated
company «Latvijas Gāze»
• New rules defining the supply and use of natural gas
under open market conditions
• Development and approval of new tariff calculation
methodologies for transmission, storage and
distribution

8. 8
DISTRICT HEATING
Revision of regulation methods impacted by the
expected gas market opening:
Some of probable options :
• No final heat price regulation for heat production
using gas
• Price cap for the generation price and final sales
tariff linked to efficiency (curve based on
capacity)
Expected major developments in the regulated
industries and regulatory challenges in 2016