Ukrenergo plans to repay debts on Ukrainian balancing market by year's end - CEO
MOSCOW. Aug 6 (Interfax) - Ukrenergo CEO Vladimir Kudritsky has reiterated the company's plans to fully repay its debts on the balancing market (UAH 16.5 billion as of early July) by the end of the year, noting that at the same time the government and parliament are working out mechanisms for halting their accumulation and guaranteed electricity supplies to protected consumers.
"Indeed, we are planning to fully repay debts on the balancing market this year. A government resolution and a bill are also at a very advanced stage, which enable us not to accumulate these debts further. This is because halting the accumulation of debts, which result from the fact that certain consumers, which are also certain public and utility companies, simply do not pay for electricity, is the most difficult aspect of this problem," Ukrainian media quoted him as saying at an event dealing with new opportunities for businesses and communities in decentralized generation in Kiev on Monday.
The number of protected consumers who cannot be disconnected from power supply and the mechanism for providing them with electricity are being determined now, he said.
"The scheme of its supply is being determined for those protected consumers who really cannot have money to pay for electricity, and it is currently being formalized who will provide them with the resource [...], because their disconnection entails some severe consequences. It will not be such a large amount, as this is residual consumption not covered by payments. In other words, these are affordable volumes for the energy system. The question is who will be this source," Kudritsky said in comments to journalists on the sidelines of the event.
He added that the list of protected consumers might include several dozens of entities, while there are several thousand non-payers now.
For his part, Verkhovna Rada Energy, Housing and Utilities Committee head Andrei Gerus elaborated at the event on the essence of the bill, which should contribute to halting the accumulation of debts on the balancing market (on amendments to the law on the electricity market regarding the application of the algorithm of distributing funds from the current account with a special mode of use).
"Those who do not pay for electricity will be disconnected or will remain in the service of the supplier of last resort, but on the condition of opening a special account. All funds from economic activity are transferred to it, and a part of them is written off for electricity. We predict that half of the enterprises will immediately drop from the balancing market, because it seems that sometimes it is used as a scheme to avoid paying for electricity. There will be no enterprises that pay zero for electricity," Gerus said.
This will stop the emergence of new debts on the market, or they will be very few, he said.
Kudritsky also added that currently there are several ways to repay debts, in particular, closing their part from the dispatch tariff, also from the funds earned from the sale of interstate sections, and most importantly, by drawing external financing.
"We are planning to make a one-time transaction with the IFIs [international finance organizations] in order to pay off the debts in full," Kudritsky said, confirming the plans announced in April, but declining to specify the details of the talks.
At the same time, he said that since the beginning of the crisis, Ukrenergo has already raised 1.5 billion euros in grants and loans from the IFIs, which also contributed to the repayment of part of the debts on the balancing market.
As reported, on May 27, the government registered the bill, and on July 19, the Rada's energy committee recommended that a bill based on this document be included in the agenda and adopted as a basis. The bill provides for the opening of current accounts with a special mode of use, the funds from which will be distributed in line with an algorithm determined by the national regulator. Previously, it was noted on the market that the approval of the mechanism of non-accumulation of debts will promote the attraction of funds of the IFIs for the repayment of existing ones.
Last December, Kudritsky said that debts on the balancing market continue to grow, "because there are 5,500 consumers who do not pay for electricity, but we can not disconnect them."
On July 31, the Ukrainian National Commission Regulating the Energy and Utilities Sector approved a draft resolution reallocating expenses in Ukrenergo's tariff for dispatching for 2024, and thanks to the projected saving of expenses for the purchase of auxiliary services, services on the market will be funded for UAH 2.33 billion.
On July 12, the Rada's Energy Committee proposed allocating Ukrenergo's funds from the sale of interstate cross-sectional capacity during import and export operations with electricity to repay debts of the transmission system operator on the balancing market and to the Guaranteed Buyer state-owned company in equal measure.
The committee decided to introduce a corresponding amendment to the current legislation, under which funds from the sale of the cross-section are used to build interstate grids, through the adoption of a bill regarding the use of vocabulary in the area of implementing smart grids.
In early July, Ukrenergo's debts on the balancing market dropped to UAH 16.5 billion from UAH 19.5 billion.
