Banner map engl

Electricity for industry can be reduced by 20%

19 August 2019

The Presidential representative in the government calls three steps to reduce electricity prices for non-domestic customers

Electricity for non-domestic customers can be reduced by about 20% in three steps: change of special Public Service Obligations (PSO) imposed on NNEGC Energoatom and Ukrhydroenergo PJSC, change ofprice caps and tariff reduction of NPC Ukrenergo. Andrii Herus, the Presidential representative in the government, told this.

Andrii Herus said that during a meeting with the President on the operation of a new model of the electricity market and preparation for the autumn-winter period they considered the possibility of reducing the price of electricity for non-domestic consumers (industry, budget organizations).

First of all, he expects that the Cabinet of Ministers will change the resolution on imposition of the Public Service Obligations (PSO) on NNEGC Energoatom and Ukrhydroenergo PJSC. In particular, there should be increased PSO for Ukrhydroenergo PJSC.

"We expect the resolution to reduce three-fold the Ukrenergo's tariff: the current tariff is 32 kopecks per kWh, and 8-9 kopecks is expected. The new PSO resolution may reduce Ukrenergo's tariff, which will reduce the price of electricity for industrial customers by about 11%," said Andrii Herus.

To prepare for revision the PSO resolution, a meeting with the Ministry of Energy and Coal Industry and the industrial Deputy Prime Minister Volodymyr Kistion is scheduled for Tuesday, August 20.

The next step is to review the price caps on intraday market and the "day-ahead" market. According to Herus, the National Commission for the State Regulation of Energy and Utilities (NERC) is currently working on developing price caps and calculating the Ukrenergo's tariff – when and how it can be reduced.

"When decreeing (the PSO revision – Ed.) the Cabinet can reduce the Ukrenergo’s tariff. We will analyze when as soon as possible such decisions can be implemented – either on September 1 or October 1," said Andrii Herus.

As for the price caps, the Presidential representative said that the night price caps should be raised by 30% and the daily ones – reduced by 15-20%.

READ ALSO: New electricity market: waves, rocks and reefs.

It should be reminded that the government imposed the PSO on NNEGC Energoatom and Ukrhydroenergo PJSC – to sell electricity at fixed price for the needs of population and technological losses of distribution system operators and transmission operator. And the NERC limited the increase in the prices on intraday market (IDM) and the "day-ahead" market (DAM) by setting the price caps. However, with the launch of the new market, there was a shortage of low-priced electricity for non-domestic customers, and in the "day-ahead" market its participants began to create artificial shortages.

As a result, electricity for non-domestic customers went up by about 25-30%.

 index 280%d1%85360 web eng