Nikopol Ferroalloy Plant filed another lawsuit against Ukrenergo

“On July 22, JSC Nikopol Ferroalloy Plant filed a new lawsuit to the Kyiv District Administrative Court for recognizing the Regulator’s decision unlawful and canceling the decree, which established the tariff of SOE Ukrenergo for electricity transmission by main and interstate networks from August 1, 2019”, it is said in a statement of Ukrenergo.

The National Energy and Utilities Regulatory Commission’s document stipulates that the new transmission tariff in the amount of 312.14 UAH/MWh will be effective from August 1, 2019. At the same time, it is 10% lower than the previous one, valid from July 1.

Ukrenergo noted that the reduction in tariff was made possible by reducing the company's expenses for the purchase of electricity to compensate for its technological losses.

The reduction of these costs (from 3.083 to 1.162 billion UAH) is due to the mechanism of imposing PSO on Ukrenergo, which provides for the acquisition of up to 80% of losses at electronic auctions at marginal prices in the SOE NNEGC Energoatom, and 20% – at the average price of electricity in the “day-ahead market”.

At the same time, the tariff retains expenses in the amount of 12.397 million UAH for the fulfillment of PSO to ensure an increase in the share of electricity production from renewable energy sources.

Before the launch of the new electricity market, these expenses were included in the wholesale market price of electricity, according to which Energorynok was selling electricity to all market participants. During the year, the state enterprise Energorynok compensated Ukrenergo for these technological losses in the networks.

Recall that on June 27, the Kyiv District Administrative Court, as a result of the claim of JSC Nikopol Ferroalloy Plant, suspended the Regulator’s resolution, which established Ukrenergo’s tariffs for transmission and dispatch control from July 1.

In particular, the decisions of the National Regulatory Commission, which approved the tariff for electricity transmission at the level of 347.43 UAH/MWh and the tariff for dispatch control at the level of 8.9 UAH/MWh were suspended.  

Now Ukrenergo operates at the tariff that the Regulator set on 12.12.2018, at the level of 54.7 MWh.

This tariff does not ensure the fulfillment of market functions assigned to NPC Ukrenergo, PSO and due to the lack of funding sources leads to the accumulation of financial obligations to market participants.

Tags: contracts, court, legislation, electricity, NEURC, energy market, Ukrenergo, ETL, electricity market

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