ICC Ukraine urges NEURC to cancel the increase in electricity transmission tariffs
27 November 11:48
The Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine) has appealed to the National Energy and Utilities Regulatory Commission (NEURC) to maintain the current electricity transmission tariff. This was reported by uaprom.info, which has the relevant letter, reports Komersant ukrainskyi
The current electricity transmission tariff is UAH 528.57/MWh. However, starting in 2025, according to the decision of the National Energy and Utilities Regulatory Commission, it will increase by 25.8% to UAH 665.27/MWh in 2025.
ICC Ukraine calls on the regulator to cancel the decision to increase the tariff and leave it at the current level in 2025. The organization argues that Ukrenergo can optimize its costs and warns of the threat of an excessive tariff burden on business.
Threat to the economy and business
ICC Ukraine notes that a tariff increase of almost 26% could lead to additional costs for the economy of more than UAH 13 billion, which, combined with other economic difficulties, threatens to close businesses. This, in turn, could affect the support of the Armed Forces of Ukraine, the provision of goods to the population, and the country’s recovery from the war. The situation is particularly difficult in export industries, such as grain, metals and ore, which are already experiencing a crisis due to low demand and falling prices.
Suggestions for cost optimization
In its appeal, ICC Ukraine emphasizes the potential for cost optimization in the structure of Ukrenergo’s tariff. In particular, the following actions can be taken
- reduce technological electricity losses by conducting audits of networks and combating abuses, instead of increasing the cost of compensating them from UAH 12.3 to 14.3 billion
- reduce the discount on the cost of electricity for households from renewable energy sources (RES) from 22% to 20% and revise the volume of projected generation for 2025;
- exclude loan servicing costs during the war from the tariff structure, offering debt restructuring and interest capitalization until the end of martial law;
- to finance settlements with ENTSO-E members at the expense of revenues from the sale of access to interstate crossings, rather than by raising tariffs.
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The NEURC decided to increase the electricity transmission tariff in 2025 on November 13. The tariff increase means an increase in the cost of services provided by NPC Ukrenergo for the transportation of electricity from producer to consumer.
The official reasons for the tariff increase include a decrease in electricity production and transmission, an increase in compensation for technological costs, salaries at Ukrenergo, loan payments and expenses for special obligations for settlements with renewable energy generation. Inflation and currency appreciation were also taken into account.
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Situation in the Ukrainian energy sector
on March 22, 2024, Russia resumed its attacks on the Ukrainian energy sector, carrying out one of the most massive shelling operations in the entire period of the full-scale war. In particular, DniproHES and other Ukrainian energy facilities were hit. Since then, Russia has been regularly shelling Ukrainian energy infrastructure.
For example, the Russians destroyed the Trypillia and Zmiiv thermal power plants, causing Centrenergo to lose 100% of its generation. Also, 5 of DTEK’s 6 thermal power plants were severely damaged.
After that, power outages began again in Ukraine, Ukrenergo introduced blackout schedules, and the government raised electricity tariffs by 60% at once.
At the same time, the Cabinet of Ministers decided to build two new units at the Khmelnytsky N PP and has already received approval from the relevant parliamentary committee. The Razumkov Center has criticized these plans, but some experts believe that only traitors or scoundrels are against the construction of nuclear power plants today.
Russia launched another massive attack on the Ukrainian energy sector on August 26. This time, they hit distribution and power generation systems, and the Kyiv hydroelectric power plant was also attacked.
Russia carried out the most massive shelling of Ukraine on November 17, 2024, firing 127 cruise, ballistic, and supersonic missiles and 109 attack drones. DTEK reported serious damage to its thermal power plants. The situation in Odesa and Odesa region was the most difficult: on the night of July 18, the city was partially without electricity and water. Ukraine reintroduces power outage schedules on July 18
Some experts believe that the blackouts may last until spring. And the Center for Countering Disinformation of the National Security and Defense Council of Ukraine recently voiced the worst-case scenario, which envisages blackouts of up to 20 hours a day.
