Natural gas market for homes – fully open

In the future, household users will be able to choose the most suitable natural gas dealer and offer for their consumption, and the price of natural gas will be determined by mutual agreement by both parties – the user and the natural gas seller.

The natural gas market in Latvia was partially opened in 2017, but in recent years home users have had the option to continue buying natural gas as a connected user from the public trader JSC “Latvijas gāze” on a natural gas tariff approved by the PURC. or buying natural gas at unregulated price from the market or any natural gas trader, which enables the sale of natural gas to home users.

Taking into account the results of the survey conducted by the KYB among merchants, three merchants currently provide services to households – “Latvijas gāze”, JSC “Latvenergo” with the trade name “Elektrum” and SIA “Elenger”. The KYB estimates that more households will be able to sell natural gas over time.

KYB President Alda Ozola announced that although the KYB will no longer set the natural gas price for home users, the KYB will continue to set natural gas transmission and distribution tariffs and will monitor natural gas traders’ compliance with this tariff. current regulations. For households that use natural gas for cooking, the variation in costs will be relatively small. KYB expects that by the start of the next heating season, the vast majority of households using natural gas for heating will have carefully evaluated their situation, selected dealers and signed new contracts.

The Ministry of Climate and Energy (KEM) explains that when creating regulation together with its cooperation partners, solutions are sought that create the least possible administrative burden for users during market opening, while at the same time balancing competition and costs. long term.

On the other hand, Baiba Vītoliņa, Director of the Consumer Rights Protection Center (PTAC), invites home users to evaluate the offers of various natural gas traders, paying attention to a few important points. “While choosing a natural gas trader, the offers of traders should be carefully evaluated so that the selected natural gas trader, price, contract and payment method are suitable for natural gas consumption habits. The method of setting the price, the minimum duration of the contract, the additional conditions and the contractual penalties in case of termination of the contract,” says Vītoliņa.

The PUK indicates that household users will be offered two types of products – fixed price (price remains unchanged over a period of time) and variable or swap price product (depends on the price on the exchange). Each user is advised to examine the offers of the merchants and consider which of the offered products will be most beneficial to their consumption habits.

In the case of a variable-priced product, the price of natural gas to the user is determined according to the TTF (“Title Transfer Facility”) natural gas market price and may change every month depending on the developments in the world natural gas market. . It should be noted that member businesses may apply a workplace service fee, which must be reflected in the offer and invoice.

There are two types of contracts for a fixed price product – fixed prices and universal service (UP) agreed between the seller and the user.

In the case of a fixed price, the trader offers a fixed price for a certain period of time. The contract is usually concluded for half a year or a year, but can also be concluded for two or more years or without a specified period. At the same time, it should be noted that the trader may reserve the right to change the price, for example, every six months.

Therefore, before entering into a fixed price contract, it is recommended to find out how often the trader reserves the right to change (revise) the price of natural gas. Likewise, the trader is obliged to inform the user about this at least one month before the end of the contract and to explain the options for future action. However, users are also advised to pay attention to the duration of the contract and think about the future choice in a timely manner. When concluding the contract, you should pay attention to whether there is a penalty for early termination of the contract. PUK states that this is very important if the user wants to change the gas product or enter into a gas supply contract with another trader.

In the case of a UP contract (all traders are obliged to offer UP), the trader keeps the natural gas price fixed for six months. The User can terminate existing UP contracts at any time without penalty. At the same time, it should be noted that this service may be more expensive than others available on the market.

Natural gas dealers can be changed every month until the 15th of the current month. For example, if a new natural gas trading contract is signed by April 15 of this year, the selected trader will provide the natural gas supply on May 1. On the other hand, you can change products from the current dealer every month until the 31st of the current month.

You can find out the offers of natural gas dealers by consulting the dealers’ websites or by phone.

The contract can also be changed on the seller’s websites or by phone, but before that you should carefully familiarize yourself with the seller’s offer, study not only the natural gas price quote, but also the contract and its terms (for example, for how long). A contract is concluded on whether a fixed price or a variable (exchange) price will be applied to natural gas, what the market price of natural gas is at the time of signing the contract, or what the penalty is in case of early payment. termination of the contract). The terms of the contract should not differ from the offer made to the user.

If the user already buys natural gas from “Latvijas gas” at a tariff regulated by the KYB and has not made a choice to conclude a new natural gas sales contract with one of the traders by April 15, the user will continue to receive natural gas from “Latvijas gas” at the universal service (UP) price. to take.

Basically, merchants’ offerings provide payment based on the consumption of each month by sending a meter reading and receiving an invoice.

Some offers also provide equalized payment (the same amount is paid each month based on average past natural gas consumption). It is important to know that in case of PUK, equalized payment, after a certain period (usually after one year) the trader will recalculate based on the actual natural gas consumption of the user. As a result of the recalculation, it can be determined that both the user overpaid and the user must pay the equalized payment and the difference between actual consumption and actual costs. In other words, it may be necessary to make an extra payment after recalculation without tracking the actual natural gas consumption and actual costs.

In the case of UP, KYB will check whether the natural gas trader, when expressing the UP offer, complies with all the conditions of the UP offer as set out in the regulatory laws and the correctness of the wording of the UP offers. If the user suspects that the UP is applied incorrectly on the invoice, SPRK invites him to contact SPRK by writing to “sprk@sprk.gov.lv”.

On the other hand, if you are unable to resolve a dispute with a gas trader regarding possibly unfair terms of contract or unfair business practices, you can seek advice from PTAC by writing or calling “pasts@ptac.gov.lv”. 65452554.