The anticipated decrease in the price of district heating is under threat, according to the Czech Republic’s Heat Companies Association. The association has stated that several hundred thousand households that receive district heating should not expect a drop in prices due to the planned increase in the regulated part of the gas price from January.
However, the Energy Regulatory Office (ERÚ) disagrees with this interpretation. ERÚ argues that the regulated component of the gas price will still constitute a significantly minor part of the total gas price, even after the proposed increase. For major consumers, this will be approximately one-tenth in the coming year.
The Heat Companies Association has voiced concerns that the regulatory office’s proposal last week to more than double gas transportation payments and increase distribution by 40% has drastically decreased the room for price reduction. “Now the drop in prices is questionable,” said Martin Hájek, executive director of the Heat Companies Association.
According to Hájek, the price increase, which the industry estimates at two billion Czech Koruna, is mainly due to the fact that gas transporters, Net4Gas, whose buyer is the state operator of the transport system ČEPS, have dramatically reduced revenues due to the reduction of gas transit through the Czech Republic and now need finances to repay their obligations.
The ERÚ has admitted that the regulator proposed to increase gas transportation fees within the regulated component precisely because the volume of transit through the Czech Republic has rapidly declined following the outbreak of war in Ukraine. The fees for domestic customers are, therefore, set to increase according to the draft pricing decisions.
However, the Heat Companies Association has also pointed out that the payment for gas transit through the Czech Republic should be cheaper than domestic supply, which it labeled absurd. “It is a purposeful comparison of two different pricing decisions issued at different times and under different conditions,” responded Kebort, a spokesperson of the ERÚ.