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Electricity tariff for Ukrainians should be twice as high

In Ukraine, from July 1, 2021, a new decree on electricity tariffs for the population will come into effect. Even now, at a price of 1.68 UAH per kW * hour, the real cost is from 2.6 to 4 UAH per kW * hour (depending on the region).

About this on your page in Facebook wrote the Deputy Minister of Energy Yuri Boyko… The same information OBOZREVATEL the interlocutors in the Cabinet of Ministers also reported.

What should be the tariff?

The electricity tariff consists of: the cost of the current itself, the tariff for transmission by Ukrenergo networks, the tariff for distribution by low-voltage networks, the tariff for the supply and taxes. The current the price of UAH 1.68 does not cover real costs. only for transportation you have to pay UAH 1.51.

According to Boyko, now the price should be:

  • 2.6-2.96 UAH per kW * hour in Kiev and Dnepropetrovsk region;

  • 3.7-4 UAH per kW * hour in Ivano-Frankivsk and Lugansk regions.

That is, each region has its own cost price. But the costs are divided (and will be divided) by everyone, so as not to create different conditions for Ukrainians, depending on their place of residence. As the interlocutors tell OBOZREVATEL in government, now the cost of kW * hour of electricity should be on average at the level of 3 UAH.

The following decisions are also pushing prices up:

  • transmission tariff for Ukrenergo was increased to 35 kopecks. per kW * hour (by 21%);

  • the weighted average distribution tariff increased by 31% (up to UAH 1.06);

  • the weighted average tariff for the supply is about 10 kopecks. per kW * hour.

What will happen if the tariff is not increased?

The amount of debt of the State Enterprise “Guaranteed Buyer” to “Energoatom” for electricity at the end of the year would have amounted to UAH 5-5.4 billion. Of these, UAH 2.4 billion is underpayment due to a too low price for residential consumers (from 18 kopecks, for which Energoatom sells electricity to SOEs, the latter collects only 9 kopecks for each kWh sold).

“In addition, due to the significant volumes of electricity sales within the JI at a preferential price, the company will objectively not be able to balance its financial condition by selling the remaining volumes in competitive market segments,” Boyko explains.

What solution did you develop?

  • To eliminate, starting from July 1, an intermediary between producers and suppliers of electric energy to the population – State Enterprise “Guaranteed Buyer”;

  • eliminate the mutual influence of the two JI models (for the development of renewable energy sources and for ensuring the availability of electricity for the population);

  • direct contractual relations will eliminate the methodological imbalance that existed in the previous JI model and led to the accumulation of debt;

  • increase in the supply of Ukrhydroenergo by 43% against the previous forecast balance.

“The following feature of the new PSO model should be noted – in the structure of the final price for electric energy of household consumers, each kopeck paid for the generated electricity will now be sent directly to Energoatom and Ukrhydroenergo,” Boyko notes.

Also, it will not be possible to avoid the rise in prices for household consumers. This model was not officially presented in the Cabinet of Ministers, however, according to the interlocutors OBOZREVATEL in the government, they are considering the possibility of raising the price for those who spend more than 300-500 kW * hour of electricity per month up to 3 UAH per kW * hour. At the same time, the majority of Ukrainians consume on average about 170 kWh of electricity.

Note that electricity tariffs in Ukraine are constrained by the Cabinet of Ministers with the help of a special decree, which obliges the company to sell “electricity” at a set price (the so-called PSO).

As reported OBOZREVATEL, in Ukraine the amount of subsidies may decrease by about 40% after quarantine.

Each family owes an average of 3769 UAH for utilities. Wherein a year ago this figure was at the level of 3500 UAH.

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