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  • Clarification on payment for transmission services when exporting the electricity

    Recently, representatives of DTEK Energy have publicly accused NPC Ukrenergo of allegedly illegal including export and import volumes into the transmission tariff invoices. 

    In particular, they have emphasised that no regulatory act imposes obligations to pay for electricity transmission in the course of export operations.

    NPC Ukrenergo informs that in accordance with paragraph 5.1 of Section XI of the Transmission Network Code (TNC) approved by the Resolution of NEURC No. 309 of 14.03.2018, the Contract on the Provision of Electricity Transmission Services establishes the obligations and rights of the parties in exporting, importing, and transiting of electricity.

    The transmission tariff for the second half of 2019 was calculated taking into account the volume of electricity exports. After all, in determining the transmission volume, the indicators of the forecast electricity balance of the IPS of Ukraine for 2019, exports being included, were taken into account.

    The electricity transmission service is actually provided, and its revenue was taken into account when calculating the tariff for this service.

    As some of Ukrenergo’s counterparties have questions about the need to pay for the transmission of electricity exports, the company approached NEURC for clarification. According to paragraph 14 of Part 1 of Article 17 of the Law of Ukraine “On National Energy and Utilities Regulatory Commission”, the Regulator provides clarifications on the application of its regulations.

    In its clarification, the Regulator noted that “since electricity exporters actually obtain transmission services and use the transmission system operator’s networks to transmit electricity to the power grid of the target country, they shall pay for transmission services in the amount of exported electricity”.

    Therefore, since the Transmission Network Code explicitly indicates that the transmission service contract establishes the obligations of the parties when exporting the electricity, and the export volumes are taken into account when setting the transmission tariff, NPC Ukrenergo has every reason to invoice for transmission services based on the volume of electricity exports.

    Regarding invoicing for electricity imports, the NEURC letter stated that market participants (suppliers, distribution system operators, producers, or end users) pay for transmission services when importing electricity. Therefore, electricity importers do not pay for electricity transmission services when importing electricity. Accordingly, Ukrenergo does not include electricity imports in transmission invoices, and has recalculated the payments for relevant periods to all market participants, which previously had been accounted for these volumes.

    The amendments to the Transmission Network Code are still under discussion at NEURC. These amendments will ultimately address the issue of payment for transmission services when exporting electricity.

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