The court ruled on tariffs, which makes the operation of the new electricity market impossible – Ukrenergo (updated)

The court suspended the resolution of the National Energy and Utilities Regulatory Commission No.954 and No.955 dated June 7, 2019, which set tariffs for NPC Ukrenergo for electricity transmission and dispatch control services for the second half of the year.  It is reported by the press service of Ukrenergo.

“The decision of Kyiv District Administrative Court will lead to the collapse of the new electricity market as the regulations of the Regulator were suspended, and they were adopted to ensure the new algorithms of the market”, said Vsevolod Kovalchuk.  

Previously, the loss of electricity in the transmission networks during transmission was covered by SOE Energorynok, which no longer functions in the new market model.  Compensation was also paid through Energorynok to electricity producers who operate at guaranteed green tariffs (wind farms, SPPs and other renewables).

In addition, through the tariff Ukrenergo covers the cost of ancillary services provided by the generating companies of the United Energy System of Ukraine to ensure the required level of reserves.

In order to ensure the functioning of the new market model, the Regulator included these expenses into the composition of NPC Ukrenergo, effectively transferring responsibility from Energorynok to the system operator. Therefore, these tariffs do not affect the calculation of the projected cost of electricity.

“Non-application of these tariffs makes it impossible to pay for electricity, which is lost in the transmission networks, to compensate producers who operate at “green” tariffs, as well as to pay for ancillary services to maintain reserves in the UESU.  So, it excludes the functioning of the new market model”, the message says. 

On July 3, 2019 the National Energy and Utilities Regulatory Commission filed an appeal against the decision of the District Administrative Court to secure a claim in the case of JSC Nikopol Ferroalloy Plant. The Commission reported it on Facebook.

“The National Energy and Utilities Regulatory Commission strongly disagrees with the decision of Kyiv District Administrative Court dated June 27, 2019 to satisfy the application of the joint-stock company Nikopol Ferroalloy Plant to suspend the decisions of the National Energy and Utilities Regulatory Commission to establish a tariff for electricity transmission services and a tariff for dispatching services (operational technology) for the management of the state enterprise NPC Ukrenergo for the 2nd half of 2019”, it is said in a statement.

The Commission notes that the tariffs for the services of the transmission system operator were adopted in accordance with the Law of Ukraine “On the Electricity Market” and took into account the key components for launching and operating the new model of the competitive electricity market.

It is also noted that at the time of the legal dispute, there might be non-payment by the transmission system operator (SOE NPC Ukrenergo) for electricity for the purchase of technological consumption in power grids and non-payment for electricity for producers from alternative energy sources.


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Tags: contracts, tariffs, court, legislation, electricity, NEURC, Ukrenergo, feed-in tariff, electricity market

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