Photo from UNIAN
The key threat is the accumulation of debt after the launch of the new market's retail segment on January 1, 2019.
The state-owned operator of Ukraine's united power grids, Ukrenergo, has warned the Verkhovna Rada, Ukraine's parliament, and the Cabinet of Ministers of possible manipulation by market players as the risk of an uncontrolled rise in the electricity prices due to the high concentration of market power by market participants if the free energy market is launched in Ukraine on July 1.
That is according to a letter signed by Ukrenergo CEO Vsevolod Kovalchuk and Chairman of Ukrenergo's Supervisory Board Sevki Acuner. The document was published by Ukrainian MP Serhiy Leshchenko, according to the Nashi Groshi ("Our Money") project.
Ukrenergo associates the risk of rising electricity prices with a high concentration of market power. "More than 75% of all electricity falls on two market participants, namely the National Nuclear Energy Generating Company of Ukraine Energoatom and the DTEK group of companies," the publication said.
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The key threat is the accumulation of debt after the launch of the new market's retail segment on January 1, 2019. The Ukrainian state-owned enterprise Ukrinterenergo ("last resort" supplier) has already accumulated UAH 700 million (US$26.5 million) in debt over the four months of operation.
Ukrenergo is also concerned about the quality of commercial electricity metering data. Regional energy distribution companies (oblenergos) would have to implement it on a daily basis in accordance with paragraph 68 of Article 7 of the country's law on the electricity market. However, this is not happening yet.
"The correct size of the supplier's nonbalance can be calculated only after 90 days, due to the technological unreadiness of distribution system operators [oblenergos]. For example, the state-run enterprise Energorynok is still correcting the data for January 2019. Accordingly, there is a significant risk that suppliers will go bankrupt before commercial accounting data will be obtained. To date, the amount of such incorrectly calculated nonbalances may amount to UAH 200 million ($5.6 million) every day," Ukrenergo said.