The directors of the Energy Market Council said at a March 28 meeting in Kyiv that they do not support Yuliya Tymoshenko’s idea to deny regional energy (oblenerho) companies the right to sell electricity, reports the Ukrayinski Novyny Agency.
“All the decisions we have are bad. We must decide to make the Cabinet and Energy Market Council refuse to sign this document,” says Ihor Sverdlov, manager of Donbasenerho.
“Once they adopt this resolution monetary returns will drop 50%,” says Yuri Andriychuk, chairman of the board, Zhytomyroblenerho, meaning what will happen if the district energy companies are forbidden to sell electricity.
Simultaneously, Energy Market Council directors believe the energy market rules must be changed; they propose that contracts be made directly between the generating and distribution companies and expel independent suppliers from the retail market, while detaching Enerhorynok from Ukrenerho. “We must authorize the district energy and generating companies to make direct contracts. I must know who to hold responsible for what. There must be a single supplier in a given oblast, the district energy company,” says Volodymyr Bondarenko, Dniproenerho chairman of the board.
On March 17 Deputy Prime Minister Yuliya Tymoshenko submitted a modified draft Cabinet resolution stipulating changes in the existing energy market model, meant basically to forbid the district energy companies to sell electricity and setting up alternative power supply structures. In particular, Ms. Tymoshenko proposes lowering the bid validity bond for the successful bidders for regional power supply tenders, such that it will be 50% of the monthly cost of oblast energy consumption. She further plans to institute this bond in the amount of two months’ cost of electricity consumed. In March, the Cabinet and the government committee for energy sector reform postponed hearings of the draft resolution proposing changes in the existing energy market model, without naming the date. On March 24 Energy Market Council directors signed a statement addressed to the Cabinet and Fuel and Energy Ministry, requesting retention of the district energy companies’ selling function. In part, the document reads that no structures should be formed to replace the existing system of electricity supplies in the oblasts of Ukraine.
The statement further maintains that the Cabinet’s draft resolution envisioning annulment of the district energy companies’ selling authority is at variance with the resolutions of the general meeting of the retail energy market operators. On February 15, the general meeting instructed the Energy Market Council to consider the possibility of invalidating Ukrenerho’s status as wholesale electricity seller and buyer and authorizing direct contracts between generating and distributing companies. The general meeting did not consider a ban on the district companies’ sales capacity. The board of directors of the Energy Market Council includes the managers of five generating and five distributing companies and the general meeting has a right to independently change the wholesale energy market rules. The law on the power industry and the Energy Market Agreement do not envisage administrative decisions determining the rules of business on the wholesale energy market by the central executive authorities.