Narva authorities requesting funds from PM to defer heating price surge

Room heat in Narva comes from the Balti power station. Photo: Matti Kamara / Pohjarannik

The price of district heating is to almost double in Narva starting from December and the leaders of the northeastern Estonian border city are requesting assistance from Prime Minister Kaja Kallas and her government to spread such a steep increase over several years, Postimees reports.

Last week, it emerged that the network company Narva Soojusvork, which supplies Narva residents with hot water and heating, received permission from the Competition Authority to raise the price of thermal energy delivered to consumers by 84 percent starting from September. The main reasons for the price hike are the significant increase in the carbon dioxide quota and natural gas market prices, along with the increased cost of thermal energy production in the Balti power station, part of AS Enefit Power, which is the power generating company of the state-owned energy group Eesti Energia.

This week, Narva Mayor Katri Raik and city council chair Tatjana Stolfat will write and send a letter to the prime minister, asking for support in order to help Narva residents survive the upcoming heating season. They are essentially asking the head of government to partially compensate for the heating price increase from the carbon dioxide tax revenue collected in the state budget.

«Compared to other local governments, Narva`s heating price was most affected by the carbon dioxide quota price increase, and we are working towards seeing the state meet us halfway,» Raik commented.

Narva Soojusvork`s current heating tariff is 47.8 euros per MWh; from September, it will rise to 88 euros, including VAT.

Such a sharp price jump shocked both the people of Narva and the city leaders, and the Narva authorities are now asking the government to pay half of the annual difference between the old and new tariffs. In this case, the thermal energy price increase over twelve months would be smaller by half than announced.

According to thermal energy consumption statistics, half of the annual price increase amounts to 7.5 million euros. This is the sum that the Narva authorities are asking from Kallas.

Narva consumers will not see these millions, of course as the money is being requested to subsidize the heat producer so that it does not raise the tariff all at once by 84 percent.

Raik emphasized that the reason for Narva requesting the money is not that district heating in Narva is set to become expensive -- it will remain one of the cheapest in Estonia even after the price increase. The reason is that the price jump in September would be extremely steep.

According to Raik, there is no money in the city budget to support Narva residents with their heating bills. Moreover, the city has to find one million euros from the budget to pay for the rising heating bills of municipal institutions.

«This means we have to review once again which buildings we need and which ones we don`t,» she acknowledged.