16:44 07.08.2020

Changes in GTS, gas distribution system codes lead to higher prices for end customers – Head of Association of Energy Suppliers

3 min read
Changes in GTS, gas distribution system codes lead to higher prices for end customers – Head of Association of Energy Suppliers

Changes proposed by the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) to the codes of gas transmission and distribution systems regarding threefold reduction of the allowable deviation of the imbalance and twofold increase in the fee for imbalance will increase pressure on gas suppliers and as a result will lead to higher prices for ultimate customers, Board Chairman of the Association of Energy Suppliers, Artem Kompan has said.

"The proposed approach to shaping the natural gas price will directly influence the actual cost of services of the GTS operator and at the same time will lead to an increase in the final components of natural gas prices for all categories of customers, in particular, households," he told Interfax-Ukraine.

According to him, the published draft amendments to the gas transmission system and gas distribution system codes do not reflect the real situation with regard to natural gas and balancing the GTS and, if approved, will lead to negative consequences for customers and the economy as a whole, as it will significantly worsen the operating conditions of gas suppliers.

"This is a 'draconian' norm – an increase in suppliers' expenditures for balancing services from 10% to 20%, as well as reduction of the size of the permissible imbalance deviation from 10% to 3%. In the present realities it is absolutely impossible to achieve this," Kompan said.

At the same time, he drew attention to the lack of any substantiation in the draft resolution of such indicators.

"We insist on maintaining the current indicators as economically justified," the head of the specialized association said.

He said that the association submitted numerous comments and suggestions to NEURC within the framework of the discussion of the draft resolution, giving grounds to assert the invalidity of the proposed amendments to the codes.

According to the draft resolution on approval of amendments to some NEURC's resolutions (amendments to the GTS Code and Gas Distribution System Code), published on NEURC's website, the commission suggests to reduce the size of the permissible deviation for customers of transportation services from 10% to 3%, and for customers of transportation services who are operators of the gas distribution systems – from 15% to 7.5%, as well as to increase the adjustment value from 10% to 20%.

In the supporting documents to the draft resolution, the commission said that it intends to take such a decision in order to avoid actions of the customers of transportation services aimed at intentional creation of volumes of the daily imbalance for the purpose of its further settlement by the GTS Operator at the average price of natural gas purchase in Gas Days (D), which is close to the market and does not consider the adjustment value (10%).

Within the limits of 10% and 15% of the admissible deviation, the customers of transportation services are encouraged to intentionally create the daily imbalance, according to the documents.

At the same time, the commission refers to the information of Gas Transmission System Operator of Ukraine (GTSOU), which specifies the intentional creation of positive or negative balances depending on the market situation and payment for imbalance.

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