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Being one of the district heating suppliers, the enterprise KAUNO ENERGIJA (KE) requests the Commission for Prices harmonizing the average district heat price at the rate by 44 % higher. The augmentation should begin from 14.67 to 21.12 cents per kilowatt-hour (excluding VAT).

On Thursday, the enterprise submitted the new heat price to the Commission for Prices, which would be in force as of 1 August 2008 up to 31 July 2012.

Controlled by several municipalities, the enterprise is not required to harmonize such price with municipality councils.

Yesterday the BNS Agency cited Sigitas Matelionis, the Director General of KE, stating that the calculations of the new price were made in accordance with the average sale price of heat generated by the Lithuanian Heat and Power Plants, as Kaunas Heat and Power Plant (KHPP) had not yet submitted to the enterprise its new heat price.

 

 

Manager of KE alleges that, once the final price of heat sold to the Heat and Power Plant is known, the Commission for Prices may readjust the calculations, presented by KE.

The Member of the Commission for Prices Danas Janulionis explained to BNS that the final decision regarding the KE price may not be reached unless the price of heat generated by KHPP is known.

The latter will be announced by the Heat and Power Plant only upon the conclusions of lawyers as regards the long-term agreement between the two power plants and the new Law on Heat Sector.

Till now price of heat, produced by KHPP, to KAUNO ELEKTRINĖ was established on the basis of the long-term agreement between these companies and KHPP has been committed to not raise the prices up to May of 2008. Yet, following the new Law on Heat Sector, heat distributors must adjust the prices with the National Control Commission for Prices and Energy every half a year. Mr Pranculis was hesitant of any predictions of when the conclusions of lawyers would be received.

 

 

After constant growth in prices of heat producers in the majority of cities several years in succession, Kaunas will face such an increase only after a five-year lasting break.

All the Lithuanian consumers will undergo the increase in the heat price by 40 % before the beginning of the heating season of the current year. KHPP announced that starting from the second half of this year heat to KAUNO ENERGIJA would be sold at 12-12.5 cents per kilowatt-hour, getting roughly twice more expensive as it is now (6.58 cents per kWh).

“We realize that economic state of the people has not yet reached the EU average and sharp increase in the heat price would hit the residents hard. We are aware of how much the urban population spends for heating, said the Head of KHPP Antanas Pranculis. Renouncing part of our profit, we will carry on selling heat to Kaunas at an attractive price.”

Heat in Lithuania is getting more expensive as a result of the increasing prices of natural gas, imported from Russia. Compared to other metropolises of the country, heat production price in Kaunas demonstrates the lowest rate presently.

“Over five years prices of natural gas imported from Russia had been in constant skyrocketing. Once the formula for the calculation of heat price is applied, the heat is to be sold at more than 18 cents. With reference to public interests, we will pursue the application of a substantial discount”, stressed Mr Pranculis.

 

 

KHPP plans focus not only on the upcoming heating season, but also on the investment project in the amount of around one billion litas for the new power plant in Kaunas of 350 MW capacity. It should be one of the most modern and economical thermal power plants in Eastern Europe.

Once built, it would ensure reliable electric power supply to the national network after the closedown of Ignalina Nuclear Power Plant (INPP), whilst Kaunas residents would be supplied with cheap heat.

Already this year it is planned to start an open invitation to tender of contractor for the turnkey construction of the power plant; works to be commenced next year. The new power plant would come into operation before the beginning of the heating season of 2011-2012.

The intended project serves the aims of the National Energy Strategy and the investment commitments by Kaunas Power Plant made to KAUNO ENERGIJA.

In 2006 Kaunas Power Plant announced its plans for the installation of additional gas turbines and augmentation of capacity of the power plant just by 60-80 megawatts before the end of 2008. Predicted major changes in the market of electric power after the shutdown of INPP have finally forced the managers of Kaunas Power Plant to initiate a much more ambitious plan for its expansion.

Russian concern GAZPROM holds 99.5 % of the authorized capital of KHPP, which amounts to 86.936 million LTL. Other 0.5 % of shares of the power plant are owned by the company DUJOTEKANA, 0.001 % - by the U.S. company CLEMENT POWER VENTURE.

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