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  • COURT LIFTS SUSPENSION OFF UKRENERGO TARIFFS FOR DISPATCHING AND TRANSMISSION FOR MAJORITY OF MARKET PARTICIPANTS

    The District Administrative Court of Kyiv unlocked the tariffs of PrJSC Ukrenergo for electricity transmission and dispatch control set by the NEURC Resolutions No.954 and No.955 of 07.06.219 since July 1, 2019. 

    Earlier, both resolutions were suspended to secure the claim by JSC Nikopol Ferroalloy Plant (NFP), which demanded that they be canceled. JSC Dniproazot, JSC Marganetsky Mining Combine, JSC Pokrovsky Mining Combine and JSC Zaporizhia Ferroalloy Plant followed suit.

    Following Ukrenergo’s petition, the court modified the measures for securing the claim so that tariffs would remain suspended only for the claimant – the tariffs approved by the NEURC Resolutions No.954 and No.955 do not apply, and the old tariff (57.4 UAH/MWh) established by the NEURC Resolution No.1905 of 12.12.2018 remains valid.

    The tariffs set by NEURC Resolutions No.954 and No.955 of June 7, 2019, (347.14 UAH/MWh and 8.9 UAH/MWh, respectively) are effective for the rest of the market in July 2019.

    Ukrenergo’s petition argued that the court blocking the new tariffs in July 2019 prevented the company from functioning in the new electricity market, as defined by the Law of Ukraine “On the Electricity Market”. More specifically, the company lacked the funds to purchase electricity to cover for grid losses and offset the costs of buying RES electricity at the “green” tariff.

    Blocking Ukrenergo’s tariff in July alone could result in a deficit of 2.4 billion UAH for the company. Hearings on the case for the Nikopol Ferroalloy Plant’s claim to repeal the NEURC regulations are scheduled for September 2019.

    As we reported earlier, due to the temporary suspension of tariffs in July 2019, Ukrenergo billed the invoices for its services with the old tariff that was in effect before July 1, 2019, – 574 UAH/MWh. At the same time, a new line – “Recommended to Pay” – was included in the bills, where the service is billed at the new tariffs: 347.43 UAH/MWh for transmission services and 8.90 UAH/MWh for services of dispatch (operational and technical) control.

    Market participants now pay for Ukrenergo’s services unevenly and at different tariffs: either old or recommended, while many pay nothing at all.

    Additional funds Ukrenergo received as payment at the recommended tariff are spent according to the priorities, pointed out by the company immediately after the blocking of new tariffs by the court: purchase of electricity to cover the grid losses and payments to the Guaranteed Buyer to offset the cost of purchasing RES-generated electricity at the “green” tariff. Compensation for RES generation is a special obligation placed on Ukrenergo in accordance with applicable law.

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