Is it possible to manage a tenfold utility bill or do they get involved in the districts? Here are the answers from Budapest!
The energy crisis will be a prominent topic at the Portfolio Budapest Economic Forum conference on October 19.
In recent weeks, several city leaders have sounded the alarm about the skyrocketing energy costs of municipalities. Székesfehérvár city manager András Cser-Palkovics made several detailed statements about the increased costs, while deputy mayor Érd directly predicted the city’s bankruptcy. After the ever-increasing statements of the city leaders, Portfolio approached the districts of Budapest and the most populous Hungarian cities with their questions.
The skyrocketing energy prices and the resulting burden on management have a larger local government scenario. Due to the high prices, energy traders are increasingly looking at who they contract with, because while this did not arise before, now it is a serious question whether the numbers will remain unpaid. Therefore, according to the news, in several places, traders simply do not give offers (we also hear such news from businesses, local governments, local government institutions), and it is good news that the districts that responded to us do not report such a problem.
Újpest and Rákosmente are in a favorable position, everyone else is frantically calculating
Municipality of Újpest at the moment, you can call yourself lucky, because last year you obtained the electricity and gas procurement for two years in the framework of a public procurement procedure – answers the mayor of Újpest, Tibor Déri. Újpest is therefore very lucky compared to the other districts, because although the detailed data on this is not public, according to experience so far, only a few signed two-year contracts last fall.
Only the head of the fourth district also wrote that for what reason the electricity and gas should be purchased now, then it would mean HUF 2-2.6 billion additional costs for the city, which
this marked lowering of the standards of the mandatory tasks of the municipality.
Thus, Újpest is currently confident that by next summer, when the new procedures must be carried out, the current situation on the energy market will ease.
The situation is similar Cancer free there is a XV. In the district’s response, he emphasized that the price of electricity is paid based on the previously conducted public procurement procedure, and the current bills do not differ from the previous ones. That way, you can only estimate how much the load will increase. Regarding the natural gas account, our institutions are in the status of last resort. Due to the above, the district is currently unable to say whether they can handle the extra burden.
Újbuda its mayor, Imre László, estimates that the municipality’s electricity costs may rise by HUF one billion in 2023. Reimbursement of the price of public catering, the increased solidarity tax and the huge jump in utility costs together impose an additional expenditure of almost HUF 3 billion on the municipality, which is why, according to the city manager,
investments and renovations may be delayed in the future.
They count similarly in Zugló also, according to their current calculations, a total of HUF 4 billion additional burden is generated from the price increase of overhead costs and various services, as well as from the increase in the solidarity contribution imposed by the government.
The municipality purchases natural gas and electricity for a period of one year through public procurement. This natural gas represents a total of HUF 857.2 million gross between October 1, 2022 and September 30, 2023, with unchanged consumption, which is HUF 746.6 million gross more than in the previous period, the Zugló municipality replies. There is also electricity, whose fee based on the 2023 contract is HUF 682.6 million, which means an increase of HUF 580.9 million with unchanged consumption.
That is, the XIV. district can pay more than HUF 1.5 billion for electricity and gas in one year, more than ten times the previous overhead costs.
The II. The municipality of the district and the majority of its institutions have been buying energy at the original reduced utility price since February 2021 until March 2023. Fény Utcai Piac is the only exception, where, based on the preliminary requests for proposals, a significant price increase of up to 10-14 times can be expected in the case of gas – answers our question in the district. The above are trying to save money, for example, even in the summer, the colleagues of the mayor’s office could not cool the offices below 25 degrees.
The district sent us detailed calculations in response to our question: the office’s electricity bill was HUF 1.6 million per month on average this year. Another average of 1.6 million per month is the electricity consumption of the school cafeteria kitchen, decorative lighting, the management of green areas, the operation of the radar speedometer, crime prevention cameras, rental housing, social housing rental electricity fees and the operation of the parking lot. Added to this was the electricity consumption of the institutions, which averaged an additional 2.6 million per month. That is, a total of 5.8 million. In terms of gas, the average of office and institutional consumption times per month is approx. It was HUF 7.6 million. These data do not include the loss of municipal companies such as Fény Utcai Piac Kft., but neither does Gyarmati Dezső Swimming Pool, where gas and electricity consumption reach HUF 4 million and HUF 7 million per month.
Due to the fluctuation of prices, we cannot be sure, but it can be expected that the current amounts may increase by multiples or even tenfold.
– highlighted the II. district.
For the time being, several districts of Budapest do not see the effects of the increased energy costs for sure, Terezváros calculates that it will definitely increase significantly, and then their expenses, the institutions’ consumption is currently being assessed. A similar statement was made by XVI. district also, where the first, higher invoices have not yet arrived, so for the time being they are trying to assess the increase in burdens. A similar response was sent by Kispest Municipality also, where the assessment of the costs of the energy price increase is also currently taking place.
Could institution closures be coming? How can districts save money?
Of course, they also ask the municipalities what measures are being taken to deal with the looming energy crisis, whether it is possible to temporarily close or merge institutions.
Due to the favorable situation in Újpest, there are no plans to introduce restrictions, but they emphasized that they support investments that reduce energy consumption. For example, in several kindergartens and specialist clinics, the lighting has already been replaced with modern LED light sources, energy renovations are being planned, and together with Óbuda and Szentendre, they are involved in the development of a concept purchased by the European Union, the aim of which is to use energy-sustaining energy sources, heat pumps instead of gas-consuming boilers, and complete public and private buildings. energy renovation.
A XV. In addition to the relatively favorable situation in the district, an Institutional Energy Reduction Working Group was established, which prepares the municipality’s multi-step action plan. In the first step, he formulates energy efficiency, which he strictly adheres to with the heads of the institutions. After that, in the second step, it regulates the opening hours of the institutions, and in the third step, if necessary, it orders the temporary closure of certain institutions.
In the past 15 years, efforts have been made to improve public education institutions, nurseries and medical clinics with energy efficiency renovations, but not all cultural, social and sports institutions could be renovated, these institutions are more affected by the negative impact of energy prices, added Rákosmente.
In Zugló, the district management is currently working on how to perform its mandatory tasks.
The district’s budget prospects for the year 2023 are critical, ensuring the coverage of the increased costs is currently not resolved
– wrote the Zugló Municipality in its response.
Drastic deductions, inflation and due to the increase in energy prices, the municipality is forced to review all voluntarily undertaken tasks and also the possibility of merging certain institutional sites in order to save energy – added the XIV. district. It was pointed out that it is mainly the overhead costs of public education, public health and social institutions whose drastic increase means serious financing difficulties. in all Zugló they don’t count on any government help, since the cabinet takes additional resources from them by raising the solidarity tax. With them, the Rákosmente municipality replies that they expect great help, and the situation in terms of energy prices will not change.
We received responses to our inquiry from several rural municipalities, which we will summarize in another article in the next few days.
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