What makes up an electricity price
Your total payment for electricity is made up of multiple components:
- The cost of electricity; it accounts only for approximately one third of the total price paid for electricity by the user on a monthly basis. The cost of electricity is affected by various factors: weather conditions, water level in rivers, supply-demand dynamics, availability of CO2 emission allowances, fuel costs, as well as prices on wholesale exchanges;
- Electricity supply costs; they are regulated by the State and approved by the Public Utilities Commission;
- The Mandatory Procurement Components (MPC), which are covered by all electricity users regardless of their trader, as prescribed by Latvian law. The MPC are paid by all users in Latvia, thereby supporting the environmentally-friendly producers and electricity types – green energy and co-generation;
- Value-added tax; it is set by the State and is identical for all electricity users.