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  • REGULATOR APPROVES NEW TARIFF FOR DISPATCH CONTROL TILL THE END OF 2019

    Today, on August 1, the NEURC has approved the new tariff of PrJSC NPC Ukrenergo for the services of dispatch (operational and technical) control at 8.9 UAH/MWh, which will be valid until the end of 2019. 

    The Regulator’s resolution enters into force the day following its publication in the Government’s official bulletin “Uriadovyi Kurier”.

    Unfortunately, the structure of the tariff approved by the Regulator disregards a number of proposals that Ukrenergo submitted back in July. These include changes in the volume of electricity supply and transmission, costs of procuring ancillary services, deduction of a portion of the net profit, and other proposals necessary for Ukrenergo’s effective functioning in the context of the new electricity market.

    The NEURC had to revise the tariff for dispatch control because, on June 27, in order to secure the claim of JSC Nikopol Ferroalloy Plant (NFP), the court suspended the Regulator’s resolution of June 7, 2019, No.955, setting the preliminary tariff to apply in the second half of 2019. For the purposes of securing the same claim, the court also suspended Ukrenergo’s tariff for electricity transmission (347.43 UAH/MWh) for II half of 2019 (NEURC Resolution No.954 of June 7, 2019). Ukrenergo, in its turn, filed an appeal against the court ruling suspending both tariffs.

    On July 12, 2019, the Regulator approved Resolution No.1411, which established the new reduced transmission tariff for Ukrenergo at 312.4 UAH/MWh, which took effect on August 1. At the same time, the court refused to suspend this tariff to secure another claim by the Nikopol Ferroalloy Plant. The tariff was reduced by lowering the cost of purchasing electricity to compensate for grid losses.

    Earlier we reported that the suspension of Ukrenergo’s transmission tariff is prohibiting the company from purchasing electricity to compensate for grid losses and to offset the difference between the market and the green tariff to the Guaranteed Buyer, inter alia.

    In July 2019, the company billed its services at the old tariff, effective before July 1, 2019, i.e. 5,740 kop/kWh. At the same time, a new line – “Recommended to Pay” – was included in the bills, where the service is billed at the new tariffs for the II half of 2019: 312.4 UAH/MWh for transmission services and 8.90 UAH/MWh for services of dispatch (operational and technical) control.

    At the moment, market participants are paying for Ukrenergo’s services unevenly and at different tariffs: either old or recommended, while many are  not paying at all.

    Additional funds, which Ukrenergo receives 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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