The National Commission for Regulation of Energy and Public Utilities (NCREP) considers it necessary to raise electricity prices for the population to be economically reasonable in order to balance the situation on the electricity market.
Kyiv. Ukraine. Ukraine Gate – September 04, 2021 – Economy
The regulator reminded that according to the law “On the electricity market”, prices and tariffs regulated by the state should not allow cross-subsidization between consumers.
“Therefore, the National Commission for Regulation of Economic Competition considers it necessary and priority to bring fixed prices for household consumers to an economically reasonable level,” the response said.
According to the National Commission, this will reduce the financial burden on the state-owned enterprises NNEGC “Energoatom” and “Ukrhydroenergo”, which have special obligations (PSO) to provide the population with cheap electricity, as well as ensure the elimination of cross-subsidization.
The NKREKP noted that today the “transitional” model of special obligations in the electricity market, which provides for the possibility of these two state-owned companies to sell electricity directly to universal service providers for the needs of the population, excluding the “guaranteed buyer”, is not applied. This is due to the fact that the Cabinet of Ministers regularly makes changes that delay the entry into force of this mechanism.
The National Commission for Regulation of Economic Competition has repeatedly pointed out that such a “transitional” model is financially effective and would allow balancing the activities of electricity producers, guaranteeing the population with the necessary electricity, and stabilizing the work of universal service providers, which will generally have a positive impact and economically “financial problems in the market,” – said the regulator.
At the same time, the press service stressed that the National Commission does not have the authority to set electricity tariffs for the population, but participates in the development of the JI mechanism.
Electricity tariffs: what you need to know
On August 11, the Cabinet of Ministers fixed the price of electricity for household consumers at UAH 1.44 per kWh with consumption of no more than 250 kWh per month, including October 1, 2021, to April 30, 2022.
At the same time, for household consumers with a consumption of more than 250 kWh per month, the price will remain at the level of the current tariff of UAH 1.68 per kWh for the entire consumption.
Prior to that, the government has repeatedly extended the validity of the resolution on the current model of imposing special obligations on the electricity market, including a fixed price for electricity for the population in the amount of UAH 1.68 per kWh.
Electricity prices for the population in Ukraine remain low and regulated due to the mechanism of special obligations (PSO) in the electricity market. At the same time, the cost of electricity for industrial consumers is 2-3 times higher and exceeds UAH 4 per kWh. This situation is called cross-subsidization when for some consumers energy is more expensive than for others. This, in turn, affects the prices of goods and services.
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Source: Ukrgate
