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KHPP: The Final Word on Heat Price will be uttered by Court
2008-10-24
The Kaunas Heat and Power Plant (KHPP) is forced to obey the State Commission’s of Price and Energy Control (SCPEC) decision on fixing a new heat price. Nevertheless, KHPP will wait until the court acknowledges this decision to be legal.
‘We do not consent to the fixed heat price, since it will cause big loss for us. However, we are to carry out the decision of SCPEC until the court decides on legality of heat price regulation,’ said Antanas Pranculis, the Director General of KHPP.
KHPP has appealed to the Vilnius Circuit Administrative Court against the obligation to coordinate prices of sold heat with the Commission. So far no court decision is adopted.
This week SCPEC confirmed the price of heat production for KHPP, 14.76 cents per kilowatt-hour. Meanwhile KHPP, basing on the SCPEC confirmed method, calculated 16.31 cents.
According to the chief of KHPP, he is aware that after confirmation of heat price by SCPEC, the KHPP shareholders are going to claim for compensation of their loss suffered for the applied mandatory pricing of heat energy production. The Ministry of Justice of Lithuania also acknowledged that the shareholders are entitled to this action.
Pursuant the contract on purchase-sale of heat energy, which was drawn in 2003 between KHPP and the enterprise KAUNO ENERGIJA, controlled by the Kaunas City Municipality, in first five years KHPP ought not to change the heat price and during later ten years the price had to be recalculated according to the formula.
KHPP met its undertaken commitments not to increase the heat price, thus creating conditions for the Kaunas inhabitants to get cheaper heat. Nonetheless, last year the Seimas amended the Law on Heat System and now KHPP has to coordinate the price of produced heat with SCPEC.