REUTERS
The final decision will be made after expert evaluation.
Buyers of electricity generated by thermal power plants in Ukraine have overpaid UAH 15 billion, or US$536 million, due to the illegal use of the so-called "Rotterdam Plus" formula.
"The other day, we've got an economic report by specialists who concluded that the use of the 'Rotterdam Plus' tariff was indeed unreasonable, the established amount of illegally charged funds received as a result of the unreasonable use of this formula is UAH 15 billion," Director of the National Anti-corruption Bureau of Ukraine (NABU) Artem Sytnyk said at a meeting of the parliament's committee on preventing and counteracting corruption, an UNIAN correspondent has reported.
The so-called "Rotterdam Plus" formula was designed to calculate the price of coal as a component of power rates on the basis of the European API2 index.
Read alsoUkraine's energy regulator cancels "Rotterdam Plus" formula for coal
"In order to make a final decision on the case, expert evaluation is needed. Now work is under way with the prosecutor to decide on the evaluation. After its results are available, there will be a final decision," he added.
In addition, Sytnyk noted that there are a number of international legal instructions in respective criminal proceedings that will also influence the final decision. "Certain work has already been done. In fact, we are now at the final stage before the final decision has been made," he stated.
As UNIAN reported, NABU in August 2017 launched criminal proceedings under which former members of the National Energy and Utilities Regulatory Commission (NEURC) are charged with acting in the interests of thermal power plants, which groundlessly used the artificially high price of coal in their power rates, the so-called "Rotterdam Plus" formula. The formula was behind exorbitant wholesale power rates at which the state-run enterprise Energomarket bought electricity from power generating companies.
NABU insists that the NEURC's decision let the operators of the thermal power plants earn super profit, while consumers of electricity sustained groundless expenses.
The "Rotterdam Plus," or Rotterdam+, is a method of forming a price of a fuel cost component (coal) in power generation by thermal power plants in Ukraine. It was introduced in March 2016 and became effective in May 2016.
The introduction of the "Rotterdam Plus" formula was predetermined by the loss by Ukraine of its coal-producing area in Donbas after Russia unleashed war in the east of Ukraine.
Almost all coal mines producing anthracite consumed by most of Ukraine's thermal power plants are now located on uncontrolled territory.
Thus, to ensure Ukraine's energy independence, the government decided to buy coal on an international exchange in the Netherlands, which sells coal from South Africa and South America.
The new pricing formula was approved by the NEURC. NEURC officials claimed that the measure would help Ukraine ensure energy independence and accumulate enough coal for a heating season.
The thermal power plants account for about 20% of Ukraine's energy balance. Coal accounts for over 80% of the thermal power plants' power generation costs.
The method sets the price of coal at the following formula: the price of coal at the ports of Amsterdam-Rotterdam-Antwerp plus costs of delivery of the coal to Ukraine. Thus, the price of coal includes transportation costs to deliver the coal to a Ukrainian port and further to thermal power plants' warehouses by rail across Ukraine.
The buying price of coal is based on the average coal price on the European market for 12 months prior to setting the reference wholesale market price, thus it is not comparable to the price of coal on the Rotterdam exchange as of a certain date.
The "Rotterdam Plus" formula is applicable to thermal power plants that consume anthracite and to stations that burn gas coal.
From September to November 2016, the price of electricity generated by Ukraine's thermal power plant doubled.
According to estimates, the introduction of the formula triggered an increase in power rates for businesses, which affected Ukrainian producers' prices.
Despite the fact that thermal power plants used only 5% of imported coal in 2016, the formula is applicable to the entire coal consumed by the thermal power plants. Since 70% of the country's thermal power facilities are controlled by Ukrainian oligarch Rinat Akhmetov's DTEK, which is also largely engaged in coal production in Ukraine, experts insist that this is a corruption element and a source of super profit for the thermal power sector.