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  • NIKOPOL FERROALLOY PLANT MADE ANOTHER STEP TO BLOCK THE UKRENERGO TARIFF

    JSC Nikopol Ferroalloy Plant filed a petition to the Kyiv District Administrative Court to suspend the NEURC decision, which set the Ukrenergo tariff for electricity transmission for the second half of 2019, in order to secure its claim against NEURC (case #640/13543/19).

    On July 22, the company  appealed the NEURC’s decision, aiming to cancel the regulation of the Regulator’s Resolution No. 1411, which established Ukrenergo’s new tariff for electricity transmission of August 1, 2019, at 312.4 UAH/MWh.

    If the District Administrative Court of Kyiv suspends this NEURC’s decision as well, Ukrenergo then will not be able to purchase electricity to compensate for technical losses in the grid, and will not be able to offset the difference between the market and the “green” tariff for the Guaranteed buyer.

    Just to remind you, on June 27, pursuant to the lawsuit by the JSC Nikopol Ferroalloy Plant, the court suspended the NEURC’s resolutions, setting Ukrenergo’s tariffs for transmission (347 UAH/MWh) and dispatch control (8.9 UAH/MWh) from July 1 .

    Because of that, since July Ukrenergo has been operating based on the tariff of 57.4 UAH /MWh, established by the decree dated 12.12.2018 № 1905. This tariff does not cover Ukrenergo’s operating costs in the new electricity market. Our company also petitioned to the Appeals Court to waive the security of the claim by Nikopol Ferroalloy Plant.

    In July alone, blocking of the tariff has led to a 2.4 billion UAH deficit in financing the company’s expenses. In the absence of further funding, Ukrenergo will be accumulating indebtedness to market participants, which will lead to the TSO’s a financial insolvency.

    At the same time, this is not Ukrenergo’s issue alone, it concerns all market participants as well, interconnected through mutual settlements. Therefore, the blocking of the TSO’s tariffs will reflect on the financial situation of other market participants, first of all in the generation, and may even destabilise the country’s power system, as a result.

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