Gas Prices Drop 5.24%; Gas Utility May Take Legal Action

Cheaper gas for households (c) James Riden

At a press conference today, head of national regulatory authority URSO Jozef Holejncik announced a cut in gas prices across the board ofr households by an average of 5.24% for this year, much to the dismay of the regulated gas utility SPP.

The decision of the Board for Regulation at URSO is final without a right of appeal, and will take effect as soon as the decision is served to SPP. Holjencik warned back in January that the regulator would not be increasing prices as requested by SPP, but would probably be cutting them, as SPP had negotiated better commodity prices with Russian gas giant Gazprom.

SPP feels unjustly treated once again, because it claims it has been generating a loss in the regulated segment of households for years and that the latest cut in the commodity price only mitigates the loss. In a statement issued by company spokesman today Peter Bednar, the company said the move was “unfounded and unjustified”.

SPP earlier warned about the possibility of legal action as it feels the regulator is not admitting certain costs that it should, like those for the underground storage of gas, which 1.3 million households are dependent on in the winter months. Another fact is that the generation of a loss is not allowed in one segment as this essentially constitutes cross-subsidies.

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