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Ukrainian Energy Association asks regulator to revise methodology for setting tariffs for CHPPs

KYIV. Oct 22 (Interfax-Ukraine) – The Ukrainian Energy Association (UEA) has called on the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) to revise the methodology for setting and setting tariffs for combined heat and power plants (CHPP).

"I would like to appeal to NEURC to start the process of revising methodology No. 991 for CHPP. We have repeatedly addressed, discussed, sent our proposals for changes, but so far this issue has not been resolved," UEA President Maksym Malashkin said at a press conference at Interfax-Ukraine.

According to him, in the context of a sharp increase in the price of natural gas and low prices on the electricity market, the distribution of CHPP costs in accordance with the current version of the methodology for the formation of heat tariffs puts the cogeneration sector in an extremely difficult situation.

In turn, Yuriy Oksymets, a member of the Kramatorskteploenergo LLC directorate, recalled that the conditions of work in the electricity and gas markets have changed over the past few years, therefore, the methodology also needs to be changed.

He said that the cogeneration sector works seasonally and does not produce heat and electricity during the inter-heating period, while such enterprises shall transfer payments for gas distribution on a regular basis, which leads to the formation of debts to regional gas companies due to cash shortages and threatens gas supply for start of work during the heating season.

"The existing debt to the regional gas suppliers was formed in the period from April to October, that is, when we did not work, because our production of goods begins with the beginning of the heating season. We are ready to pay off the debt, but from the moment we start generating some product. Let's start selling it. That is, the period of April-October is expenses, a certain part of which is provided for in the heating tariff, but it is included in the revenue part that will be from the beginning of the heating season," Oksymets said.

According to him, taking into account the specifics of cogeneration work, its tariffs should provide for the necessary costs to ensure the activities of enterprises in the inter-heating season.

The representative of Kramatorskteploenergo also said that after the liberalization of the electricity market, the company is operating at a loss due to the low prices prevailing in the market, which hinders the preparation for the heating season, in particular, has led to the formation of debt to Donetskoblgaz.

At the same time, forecasting the planned costs and consumption of energy resources for CHPPs is a more difficult task compared to other market participants, since the specifics of their work are more dependent on temperature fluctuations.

"We should revise the methodology to solve the main question: how CHPPs can live during the inter-heating season," Oksymets said.