About us

 

“We have reduced the heat price as we managed to optimize the operating expenses of the power plant and, in addition, the natural gas, imported from Russia, is still likely to be in decline”, stated Antanas Pranculis, the Director General of KHPP.

This has been already the second time during this year when KHPP cheapens the energy it produces. Earlier the heat price was in decline in April. From the beginning of the year KHPP lowered the heat price even by 29 percent.

According to Mr Pranculis, the Head of KHPP, once the power plant reduces the price of heat production, the real benefit will be felt by consumers also, because heat tariffs should be cut also by the company KAUNO ENERGIJA, controlled by the municipality of the city, which distributes heat to Kaunas consumers.

Already earlier KAUNO ENERGIJA announced that the heat price would be reduced from June by 22 percent or 5.45 cents per kilowatt-hour.

Possibility for the residents to pay less for heat, virtually, may be precluded by the decisions of the Government, as from September the Government is to reduce the preferential value added tax (VAT) rate on heat of 5 %.

“Houses are without thermal insulation and people are without protection, therefore, the residents shall retain the preferential VAT rate on heat of 5 percent. New huge business buildings consume less heat, whereas the people, in particular those residing in old blocks of flats, consume vast quantity of it”, explained Vytautas Stasiūnas, the President of the Lithuanian District Heating Association.

 

Recently, the mass media writes that purportedly KHPP failed to meet investment obligations to KAUNO ENERGIJA, thus, they will claim for the compensation of 17 billion litas at international arbitration.

KHPP Director General Mr Pranculis hopes to manage to reach peaceful agreement without the interference of any third parties. He regretted that no one had lately remembered that since 2003 KHPP had not been raising the heat price for five years, which had been the lowest in Lithuania and, consequently, the residents managed to save approximately 200 million litas. Today everyone seems to be talking only about that KHPP had not met investment obligations by failing to construct a small power plant of low benefit to the city and the country, because it is making preparations for the construction of an object in the capacity of 350 megawatts, worth one billion litas.

KAUNO ENERGIJA informed Mr Pranculis that during negotiations it would put forward the option that during the heating season the heat generation capacity of the new power plant had to exceed the heat power of 300 megawatts.

After the construction of a new power plant in the beginning of 2013, which would generate both the heat and electricity, heat production prices in Kaunas will be at the lowest level in the country. It is estimated that energy generation costs will decline by more than 20 %.

 

On 12 May the Seimas approved the amendments to the Law on Heat Sector, where the possibility to change heat prices every month is established. Following the earlier procedure for recalculation of heat prices, this was possible not as often as every half a year.

National government expects that the new procedure would help to avoid huge leap in heat prices as the changing price of gas will allow for more flexible reactions. Possibility to recalculate the heat price every month raises doubts to the experts of energy sector, who all like one, assert that the heat prices to consumers will remain stable provided the fuel prices stay unchanged.

“Should the difference in the fuel price per month be 2-3 %, the heat price to consumers shall stay unchanged. Currently, there are no regulatory documents or legal acts implementing the law and it is almost impossible to implement the recalculation of prices every month, as established in the Law on Heat Sector”, stated Vykintas Šuksteris, Member of Presidium of the Lithuanian Energy Consultants Association.

Subscribe to our press releases

Enter your email address: