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In Search for Compromises on Heat Prices of the Kaunas Heat and Power Plant
2008-07-22
Today, at the meeting of Andrius Kupčinskas, the Kaunas City Mayor, with Denis Fiodorov, the Head of Energetics Development Board of the Russian gas concern GAZPROM, the issues of regulation of prices for heat supplied to Kaunas were discussed.
GAZPROM is the main owner of the Kaunas Heat and Power Plant (KHPP), which supplies heat to the city.
‘We tried to clear up what is the fate of our investment agreement drawn with the municipality-controlled KAUNO ENERGIJA after legitimating of heat price regulation,’ said the representative of the concern D.Fiodorov after the meeting with the Kaunas City Mayor.
In his, as the investor‘s, opinion, the resolution of the Seimas to amend the Law of Heat to the aim of providing for that SCPEC has to fix the price for heat sold to KAUNO ENERGIJA cannot be applied because of the still valid contract drawn earlier with KAUNO ENERGIJA.
The long-term investment agreement signed before five years on the initiative of KAUNO ENERGIJA itself, provided for the pricing according to the formula related to changes in prices of petroleum products in European markets since the spring of 2008.
‘Five years KAUNO ENERGIJA received heat at prices smaller than those of market. Therefore, the heat prices for the Kaunas inhabitants were the smallest in whole Lithuania. We are surprised of the present desire to change the game rules for the investor, who honestly carries out its commitments,’ accentuated D.Fiodorov.
Antanas Pranculis, the KHPP Director, is sure that the agreement on heat pricing between KAUNO ENERGIJA and KHPP should be observed in order not to violate the investor‘s rights acknowledged internationally.
The Kaunas City Mayor A.Kupčinskas believes that in the next few weeks an agreement with the investor will be reached to satisfy all parties. For this reason, the joint working team is formed.
The meeting at the Kaunas Mayor’s was also participated by the Head of SCPEC Virgilijus Poderys. He admitted that the role of the Commission in this situation is limited. The SCPEC representatives will take part in the working group as observers.
According to the project on KHPP development, one of the most modern heat and power plants in East and Middle Europe will be built in Kaunas. Its capacity would reach up to 350 megawatts. The plant would produce heat for the Kaunas City consumers and electric energy for needs of whole Lithuania. The new power plant would become a reliable supplier of electric energy after closing of the Ignalina Atomic Power Plant next year.