14.07.2009, 19:58
NJSC ECU Asks Government to Consider 70% Raise in Electricity Tariffs
OREANDA-NEWS. July 14, 2009. NJSC Energy Company of Ukraine asks the Government to consider a raise in electricity tariffs for households by 70%, a source in the government informed UNIAN with reference to a letter from NJSC ECU to the Prime-Minister of Ukraine, Yulia TYMOSHENKO.
The company says that starting from September 2008, it has repeatedly addressed the Prime-Minister regarding an extremely difficult financial condition of the energy generating companies operating the thermal power plants (TPPs), the stakes in which were transferred to the authorized fund of ECU.
Furthermore, ECU has asked for help many times the Ministry of Fuel and Energy and the National Electricity Regulatory Commission (NERC), a state regulator in the electricity sector having competence in tariff and pricing policies in the industry. Yet, no actual assistance has been provided to the sector.
In its letter ECU underlines that since last August the energy generating companies have been running at a loss (except for December), and the Company has never seen such a negative margin of electricity production as in May this year (-16.9%) over 13 years of its operation of thermal generation companies: every kWh was generated at a loss of 7 kop.
In 2009, the financial and economic situation of the energy generating companies has been catastrophically deteriorating from month to month, inevitably leading to a shortage of funds over the year to an amount of UAH5.2bn. A monthly increase in the deficit is about UAH500m, so, the energy generating companies have no possibility to pay for coal; payment of wages, taxes and operating costs is under the constant threat.
In particular, ECU suggests the following measure to stabilize the situation:
1. Tariff policy (retail market):
- to increase electricity tariffs for households by 70% twice (in July and September 2009);
- to increase retail tariffs for other consumers by 4% each month from October to December 2009.
2. Coal market:
- starting from July 2009, to bring down coal prices to UAH330 per ton (the level of January 2008);
- to supply coal only within the volumes of today’s consumption (1m tons per month);
- to resume state purchases of coal by the State Reserve by having coal included into the list of the state material reserve and having stipulated the respective state financing.
3. Crediting:
- to postpone repayment of loans raised by the state company Energorynok to an amount of UAH1,025m and transferred to the energy generating companies as advances to pay coal debts to the state company Coal of Ukraine until 2010-2011;
- to amend Resolution #449 issued by the Cabinet of Ministers of Ukraine dated 14.05.2008, to provide for monthly full reimbursement of loan interests under the state budget programme designed to make loans cheaper for creating solid fuel stocks at thermal power plants.
The company says that starting from September 2008, it has repeatedly addressed the Prime-Minister regarding an extremely difficult financial condition of the energy generating companies operating the thermal power plants (TPPs), the stakes in which were transferred to the authorized fund of ECU.
Furthermore, ECU has asked for help many times the Ministry of Fuel and Energy and the National Electricity Regulatory Commission (NERC), a state regulator in the electricity sector having competence in tariff and pricing policies in the industry. Yet, no actual assistance has been provided to the sector.
In its letter ECU underlines that since last August the energy generating companies have been running at a loss (except for December), and the Company has never seen such a negative margin of electricity production as in May this year (-16.9%) over 13 years of its operation of thermal generation companies: every kWh was generated at a loss of 7 kop.
In 2009, the financial and economic situation of the energy generating companies has been catastrophically deteriorating from month to month, inevitably leading to a shortage of funds over the year to an amount of UAH5.2bn. A monthly increase in the deficit is about UAH500m, so, the energy generating companies have no possibility to pay for coal; payment of wages, taxes and operating costs is under the constant threat.
In particular, ECU suggests the following measure to stabilize the situation:
1. Tariff policy (retail market):
- to increase electricity tariffs for households by 70% twice (in July and September 2009);
- to increase retail tariffs for other consumers by 4% each month from October to December 2009.
2. Coal market:
- starting from July 2009, to bring down coal prices to UAH330 per ton (the level of January 2008);
- to supply coal only within the volumes of today’s consumption (1m tons per month);
- to resume state purchases of coal by the State Reserve by having coal included into the list of the state material reserve and having stipulated the respective state financing.
3. Crediting:
- to postpone repayment of loans raised by the state company Energorynok to an amount of UAH1,025m and transferred to the energy generating companies as advances to pay coal debts to the state company Coal of Ukraine until 2010-2011;
- to amend Resolution #449 issued by the Cabinet of Ministers of Ukraine dated 14.05.2008, to provide for monthly full reimbursement of loan interests under the state budget programme designed to make loans cheaper for creating solid fuel stocks at thermal power plants.
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