NEURC has published a draft of preliminary decision on certification of NPC Ukrenergo as a transmission system operator (TSO). The certification of Ukrenergo is a requirement of the Law of Ukraine “On the Electricity Market” and the Directive 2009/72/EC, the implementation of which is a part of Ukraine’s international obligations. Certification is also a prerequisite for obtaining a license to carry out electricity transmission activities in a new market model.
Following the review of the documents submitted by the company, the Regulator proposes to confirm in general the compliance with the requirements for unbundling and independence of the transmission system operator. In particular, the compliance with the requirements for unbundling electricity transmission activities from electricity generation and supply activities, including management, decision-making and responsibilities of the TSO was confirmed.
The final decision on certification of NPC Ukrenergo will be made only after certain steps have been taken. The key one is to amend the Law of Ukraine “On the Electricity Market”. According to Part 3 of Article 32 of the Law, the transmission system operator can only be the owner of the transmission system. At present, Ukrenergo owns the objects of the transmission system on the right of business management, and this is one of the means of realization of the property right by the state. To comply with this condition, Ukrenergo asked the Regulator to initiate appropriate amendments to the legislation.
The draft decision of NEURC also states that a number of paragraphs should be excluded from the Company’s Charter for final confirmation of certification. In particular, the monitoring and analysis of the operation of equipment and fuel movement, calculations of electricity production and fuel structure at TPP, as well as participation in the formation of scheduled repairs of power plant equipment, the development of forecast balances of fuel, etc. NEURC states that under the current legislation in the new model of the electricity market, these are not the functions, rights and obligations of the TSO.
Amendments to the Charter of PrJSC NPC Ukrenergo are within the competence of the General Meeting of the Company. The sole shareholder of Ukrenergo is the state represented by the Ministry of Finance of Ukraine.
The Regulator should make the final decision on the certification after the removal of these events and obtaining the opinion of the EU Energy Community Secretariat on the certification decision.
Please note that NPC Ukrenergo submitted to NEURC the relevant documents for certification on August 14, 2019, having done everything necessary to meet the mandatory certification requirements – corporatisation and unbundling (transferring the company to another governing body to avoid conflicts of interest).