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Dispute at Court on Fixing of Heat Prices in Kaunas
2008-07-29
The Kaunas Heat and Power Plant (KHPP) appealed to the Vilnius Circuit Administrative Court to annul the obligation placed by SCPEC (State Commission of Price and Energy Control) on coordination of prices of heat sold.
In 2003 KHPP and KAUNO ENERGIJA drew the contract on purchase-sale of heat energy. It provided for that in first five years of the contract the price of heat would not change virtually, and later on it would be recalculated according to the formula specified in the contract.
All the time KHPP observed the undertaken commitments not to increase the heat price.
However, regardless of the contract in force, in June SCPEC delivered a letter to KHPP with a request to provide the data by the heat pricing method, necessary for calculations of basic price for heat production. SCPEC motivates its position by the Law of Heat System amended by the Seimas.
‘Such request of the Commission means that virtually it does not acknowledge the provisions of the contract signed before 5 years and that it is going to fix the price for heat sold by KHPP. Consequently, we went to law to clear up the matter,’ stated Antanas Pranculis, the Director General of KHPP.
By his statement, the method for fixing of heat price is inconsistent with the procedure for calculation of heat price established by the contract of 2003.
‘Five years we observed the investment agreement, though it was not beneficial for us from the economical point of view. We want that the agreement would be observed by our partners as well, namely by KAUNO ENERGIJA and the City Municipality, which controls the former. Variation of game rules for the investor can negatively influence the future investments into development of the Kaunas Power Plant,’ insisted Antanas Pranculis, the Director General of KHPP.
The plans of KHPP provide for investments of almost 1 billion litas into a new power plant in Kaunas with capacity of 350 megawatts. After its construction the reliable supply of electric energy would be guaranteed to the consumers of Lithuania, as well as the supply of heat to the Kaunas inhabitants.