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19.02.2021

Experts explained the situation with electricity tariffs to journalists

The webinar “Why are electricity bills growing?”, held on 16 February, continued the series of educational webinars organized by the NEURC and USAID Energy Sector Transparency project.

This webinar for journalists and everyone interested in the topic was devoted to the nagging issue of rising electricity tariffs. In particular, the webinar explained what components the tariff consists of, how moneys paid by consumers are disbursed among market players, what the reasons for rising tariffs are, and what solutions the government offers to protect consumers.

The event’s speakers included Oleksandr Martyniuk, Acting General Director of the Energy Ministry’s Energy Markets Directorate; Rodion Koval, Deputy Head of the NEURC’s Strategic Development and International Coordination Directorate; Yulia Usenko, Chair of the All-Ukrainian Agency for Investments and Sustainable Development CSO; and Illia Poluliakh, an expert in electricity production and one of the authors of the Electricity Market Law.

Speaking at the webinar, Oleksandr Martyniuk, Acting General Director of the Energy Markets Directorate, said that the Energy Ministry has no plans to revise zonal electricity tariffs for households.

“As of today, there are no plans to revise the nighttime tariff. When we discussed the abolition of reduced tariff effective 1 January, the subject of zonal tariffs wasn’t even mentioned. Consumers have an uneven consumption schedule, and therefore, from the viewpoint of benefit for the power system, consumers must be stimulated economically to transfer a portion of their consumption to the nighttime,” Mr. Martyniuk said.

The webinar’s participants also discussed other options of protecting consumers. The solution of this problem could be found by defining the categories of vulnerable consumers who must be provided with subsidies to pay electricity bills, and by simultaneously charging the market price to all others, expert Illia Poluliakh said.

According to Mr. Poluliakh, in the half of Ukrainian regions the electricity tariff for households does not cover at all the cost of electricity as a commodity, because the 1.68 hryvnias per kWh paid by consumers is spent on covering the cost of delivering that electricity.

Liquidation of cross-subsidization must become one of the expected advantages from the launch of the new electricity market, expert Yulia Usenko emphasized.

“Because of the quite lengthy non-revision of the tariffs for households, the tariffs for industrial consumers became 2.5 times higher (or even more) than those for households. As a result, the new model cannot cope with the cross-subsidization problem. During 2019, the difference between the tariffs has reached 50 billion hryvnias,” Mrs. Usenko said.

During discussion, the experts pointed out that the government must define the categories of vulnerable consumers.

“I did not see a separate list of vulnerable consumer categories defined by the Cabinet of Ministers, and that adds uncertainty. Perhaps it is still in the works. The subsidy mechanism is running anyway,” the expert stressed.

Also, the webinar’s experts answered questions from journalists, Ukrainian Energy readers and Facebook viewers.

This online discussion became another event in the series of educational webinars for journalists. The participants of these webinars can gain a specialized expertise, find answers to acute questions, understand the logic of the energy sector’s functioning, and develop an own stance as regards the reform process.

The webinar held within USAID Energy Sector Transparency project implemented by DiXi Group. The contents are the sole responsibility of DiXi Group and do not necessarily reflect the views of USAID or the United States Government.

View the webinar video

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Our platforms

https://ksep.energy/en/

Independent energy educational center

http://eiti.org.ua/

National website of Extractive Industries Transparensy Initiative in Ukraine 

http://ua-energy.org/

Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform