Ukraine's electricity market watchdog to raise rates for regional companies from April 1

Ukraine's National Energy and Utilities Regulation Commission (NEURC) has decided to raise power rates for a number of regional power distribution companies (oblenergos) starting from April 1, 2018.

A relevant NCURE resolution dated January 24, 2018, was published in the official government bulletin Uriadovy Kurier.

Read alsoDebt of Ukraine's regional gas companies before Naftogaz doubleIn particular, electricity distribution rates of Cherkasyoblenergo for consumers of first-class voltage (35 kV and above) will grow by 2.3%, to UAH 66.79 (US$2.4) per MWh, while those for consumers of second-class voltage (less than 35 kV) will grow by 3.15%, to UAH 213.81 ($7.7) per MWh.

In addition, Cherkasyoblenergo's power transmission tariff for the first group of consumers will grow to UAH 10.77 ($0.39) per MWh, whereas it will rise to UAH 53.86 ($1.9) per MWh for the second group.

At the same time, Kharkivoblenergo's electricity distribution tariffs for first-class voltage consumers will grow by 31%, to UAH 27.25 ($0.98) per MWh, while tariffs for second-class voltage consumers will grow by 20%, to UAH 199.98 ($7.2) per MWh.

Power transmission tariffs of Kharkivoblenergo for the first group of consumers will rise to UAH 11.03 ($0.39) per MWh, whereas they will grow to UAH 55.16 ($1.98) per MWh for the second group.

Read alsoElectricity price may again rise in UkraineAs UNIAN reported earlier, the NCURE in January increased electricity tariffs for industrial consumers by 5-11%.

In late December 2017, the regulator approved the average annual wholesale electricity price for 2018 at UAH 1,562 ($56) per MWh (excluding VAT), which was 14.4% up from the previous indicator. Based on this value, the regulator monthly calculates electricity tariffs for industrial customers.

According to the regulator, the reasons for the increase in the wholesale price were a decrease in the share of atomic generation in the energy balance of 2018 and an increase in the share of thermal and other types of generation. It will be necessary to import 4.2 million tonnes of coal at prices of US$90 - 110 per tonne in 2018 for the thermal generation sector, more than 70% of which belongs to Rinat Akhmetov's DTEK. At the same time, the share of imports is only about 15%, while coal of domestic production accounts for over 80%.

In this regard, energy expert Andriy Gerus said that the NCURE would enable DTEK energy holding to receive an extra UAH 10 billion ($359 million).

He believes that the wholesale prices hike will lead to an increase in cross-subsidies, when prices for households are artificially understated compared to those for industrial consumers. Therefore, to address this issue the prices for households will have to be raised by 2.5 times.