Latvijas Gaze

Regulatory Filings • Sep 10, 2015

The rules on the use of transmission system approved by the Regulator do not comply with the law

On September 10, 2015, the Council of the Public Utilities Commission (the Regulator) approved the „Rules on the Use of Natural Gas Transmission System” and the „Rules on Use of Inčukalns Underground Gas Storage Facility”, which lay down the procedure how users are provided with system services including the specification of entry and exit points of the transmission system in the territory of Latvia and towards cross-border connections.

Under the „Rules on the Use of Natural Gas Transmission System” published on the Regulator’s website, the exit points to the Latvian distribution system shall be set as soon as the rules come into force. According to the interpretation provided by the Regulator, this means that consumers are given an option to choose their natural gas supplier. Previously it had been ruled that the introduction of such exit points would only be triggered by the conditions specified in the Energy Law and pertaining to the opening of the market.

The JSC "Latvijas Gāze" finds that the rules approved by the Regulator are manifestly contrary to the Energy Law whereby a free choice of trader shall only become available as of April 3, 2017 (unless certain specific conditions take effect earlier) and contrary to the share sale-purchase agreements whereby the JSC „Latvijas Gāze” is conferred exclusive rights to natural gas transmission, storage, distribution, and sale till April 3, 2017.

Given the non-observance of the Energy Law and the violation of the shareholders’ rights, the JSC „Latvijas Gāze” holds a view that the Regulator should revise and amend the approved rules.

The JSC "Latvijas Gāze" will also review other provisions of the rules and their compliance with the Latvian laws and with the agreements signed between the shareholders and the state.

Vinsents Makaris

Phone + (371) 67 369 144

E-mail: IR@lg.lv