One of the striking findings in the latest inflation figures from Statistics Iceland is the sharp rise in home heating costs.
District heating prices increased by 9.2%, and according to Landsbankinn this is the largest increase in 15 years, dating back to 2010.
“In December, new district heating tariffs came into effect, and according to Statistics Iceland’s measurements, the housing heating cost component rose by just over 9%. This item has rarely increased by such an amount, and one must go back to 2010 to find a larger increase — in January of that year the component rose by 23%,” Landsbankinn said in a statement.
Tariff increases usually have a significant impact on price measurements in January, partly due to district heating. Landsbankinn expects that the anticipated January increase in district heating prices has therefore already been reflected and will not appear again in January.
Utilities raise charges to fund infrastructure projects
By way of example, Veitur announced on 1 December that usage fees would rise by 7% for all customers, while fixed charges would increase by varying amounts depending on the size of properties and their connections.
According to Veitur, the increases are intended to cover necessary construction and investment projects and to ensure that residents and businesses across the service area continue to receive hot water safely, both now and in the future.
“It is clear that costly investments and construction projects will be required in the coming years to meet society’s growing demand for hot water,” Sólrún Kristjánsdóttir, CEO of Veitur, is quoted as saying in a statement on the company’s website.
“Necessary infrastructure development”
“Thousands of new housing units are planned within our service area, which calls for expansion of the transmission system, robust maintenance, and targeted geothermal exploration to ensure the secure delivery of hot water to residents and businesses. It is therefore necessary to implement these tariff changes now in order to meet these construction and investment needs, so that everyone can continue to enjoy this essential public service,” she is quoted as saying.
The district heating utility’s investment plan envisages spending approximately ISK 55–60 billion through to 2030.
“This represents necessary development and renewal that will ensure security of supply and reliable delivery in the future,” the statement concludes.
Source: Mbl.is
