Association of water suppliers claims threat of stopping supplies of drinking water over problems with switch to new power market
KYIV. Dec 19 (Interfax-Ukraine) – The Ukrvodokanalekologiya Association has announced that there is a threat of stopping supplies of drinking water to consumers over problems that water suppliers faced during the preparations for the launch of the electricity market from January 1, 2019.
President of the association Dmytro Novitsky said that at present one of the key problems is the unwillingness of electricity suppliers to participate in tenders of water suppliers, which want to buy electricity, due to the fact that they are "unreliable."
This concerns a debt of water supply and sewage companies to electricity suppliers appeared due to the untimely reflection of electricity prices in the tariffs for the services provided by water suppliers.
"The current tariffs of water suppliers cannot cover the expenses on purchase of electricity [both now and at the beginning of 2019], since they were approved based on the price set for electricity in 2017," Novitsky said at a press conference at Interfax-Ukraine on Wednesday.
He said that the time gap between the increase in the wholesale price of electricity for enterprises and the display of this price in the structure of tariffs for water suppliers sometimes reaches six months. So, due to the late decision-making on the increase in tariffs for the services of water suppliers, at present their debt to electricity suppliers amounts to about UAH 5.5 billion.
"Suppliers are not going to sign contracts with us, and one of the reasons for this is the fact that water suppliers are unreliable consumers of electricity, unreliable payers, because they themselves do not set the tariffs. Now water suppliers have debts for electricity in the amount of UAH 5.5 billion. It appeared as a result of the fact that the tariff of a water supplier, taking into account the actual cost of electricity, was not approved in due time," Vice President of the association Olha Babiy said, adding that currently only five water suppliers in Ukraine signed contracts.
In addition, she said that despite the fact that not so long ago, the Cabinet of Ministers identified the state-owned enterprise Ukrinterenergo as a supplier of the last resort [a legal entity which is not entitled to refuse a consumer to sign a contract, if it has not decided on a supplier, the entity is obliged to deliver electricity within 90 days from the moment of signing the contract], additional time will not help to solve the problem of finding a regular supplier.
The tariff of the electricity supplier of last resort is 30% higher than the current one, which will again lead to an increase in the water suppliers' tariff or to an increase in the debt. Moreover, if during 90 days water suppliers fail to resolve all the issues with debts and find suppliers, the requirement on the timing of the provision of services by the provider of last resort will need to be extended," she said.
According to representatives of the association, at present, the legislation does not provide for a mechanism that would prohibit stopping the supply of electricity to critical facilities.
The association called on deputies to support in the near future bill No. 9406 (dated December 14, 2018), allowing heat supply and heat generating organizations, as well as centralized water supply and sewage companies to purchase electricity from a universal service provider.
In addition, Ukrvodokanalekologiya insists on the need to approve tariffs for water suppliers as soon as possible, taking into account tariffs for electricity. As for the debt, the association expects that it will be compensated in accordance with the mechanism currently developed by the National Commission for Energy, Housing and Utilities Services (NCER).