Debts to Ukrhydroenergo on balancing market nearing 8 bln hryvni, twice as high as in 2022

MOSCOW. Nov 28 (Interfax) - The size of Ukrenergo's debt to PJSC Ukrhydroenergo on the balancing market is growing constantly, amounting to nearly 8 billion hryvni, Ukrhydroenergo General Director Igor Sirota said.

"It's almost 8 [billion hryvni]. For instance, last year it stood at 4 billion hryvni. The difference is significant. Debts have been growing, and this is a problem for us. And if this continues for another year or two, we will turn from a profitable company into a loss-making one because of the systemic absence of settlements on the balancing market," Sirota said in an interview with Ukrainian media.

State-owned companies, such as mines, regional power suppliers, VostGOK, which fail to pay for the electricity consumed on the balancing market, account for 80% of these debts, he said.

As a result of these non-payments, Ukrenergo, Ukraine's grid operator, cannot say when it will be able to pay off these debts, Sirota said.

"This is a question [growing debts on the balancing market] which I keep asking all the time and will continue to ask, because it is critical to us [...]. We need to urgently find a solution to enable the repayment of these debts," he said.

Meanwhile, Ukrenergo has paid off its debt of over 800 million hryvni to Ukrhydroenergo for auxiliary services, and Ukrhydroenergo itself currently has no debts related to public service obligations (PSOs) such as electricity supplies to the population, whereas these debts totaled 1.9 billion hryvni in spring 2023, Sirota said.

"If such a situation persists at the end of the year, and if debts on the balancing market continue to grow, then, of course, we will not be able to cover PSOs," he said.

The volume of the company's PSOs will increase by approximately 24 billion-25 billion hryvni by the end of the year, compared to the forecast of 22 billion hryvni in spring, as a result of a rise in electricity prices for the population from June 1, he said.

"Income is increasing, and so are the PSOs. They will not remain the same, because the difference between the price for household consumers and the price on the market also keeps growing. We may earn a little more, but we will have to pay a larger amount of PSOs. That is why, when there are PSOs, a rise in tariffs is not the main issue for us," Sirota said.

As regards the total volume of PSOs, which stand at around 135 billion-140 billion hryvni, 25 billion hryvni is covered by Ukrhydroenergo, and the rest by Energoatom, Sirota said.

"In other words, our funds are just over 20%," he said.