RIGA, July 11 (LETA) - The City of Riga, state companies, as well as the supervising authorities should cooperate more effectively in order to offer reasonable heating tariffs and well ahead of each new heating season, President Edgars Rinkevics said during a meeting with Riga Mayor Viesturs Kleinbergs (Progressives) at Riga Castle on Friday.

During the meeting, the president congratulated Kleinberg on his election as Riga mayor. The two officials discussed attracting foreign investment to Riga, economic and social development in Riga metropolitan area, emergency shelters in the city, and the expected increase in heating tariffs.

As reported, the Riga Municipality in talks with the Economy Ministry (EM) has undertaken to find solutions that would allow to reduce the increase in heating tariffs, but it is unlikely that the price increase will be avoided completely, Riga City Council Chairman Viesturs Kleinbergs (Progressives) told members after a meeting with the management of municipal heating company Rigas Siltums (RS).

According to Kleinbergs, the problem is not related to the operation of RS, but to the tariffs at which the municipality has to buy heat energy from Latvenergo. He pointed out that RS is forced to buy heat from Latvenergo at a higher price, and this heat is partly a residual product from electricity generation.

In talks with the EM and the Public Utilities Regulatory Commission (SPRK), the municipality wants to find out whether there is fair competition in a situation where Latvenergo "makes a certain profit by generating electricity twice - and both times partly at the expense of the residents of Riga".

"Riga residents are to some extent held hostage in this situation because Latvenergo's tariff is higher than what we are currently able to produce ourselves or what small heat producers are able to provide," Kleinbergs said.

He stressed that the municipality is ready to look for solutions so that Riga residents do not have to overpay for heating, including the possibility of creating a connection between the two banks of the Daugava River. One of the possible solutions mentioned was the buy-back of EM shares, so that Riga would become the managing partner in the company.

"Otherwise we are hostages between a minority shareholder who takes one side or the other. Riga is ready to take control of the company," Kleinbergs said.

Commenting on possible sources of funding, the Mayor stressed that "it is not a question of money, but of priorities". In his view, such an investment would allow companies for which heating is an important raw material to reduce costs and improve competitiveness.

At the same time, it is currently unknown how much of a tariff increase Riga residents will have to cope with from the autumn. "Clearly, there will be some increase," Kleinbergs said, adding that various short- and long-term solutions are being evaluated.

One short-term solution could be to involve the municipality in regulating tariffs. The municipality promises not to delay in continuing talks with the EM in order to reach an agreement on solutions "as soon as possible", as the new tariffs will enter into force already this autumn.