Why quarantined consumers may be left without electricity
23 July, 2020
Oleksandr Visir

Oleksandr Vizir

Head of the Public Union “Smart Grids of Ukraine”

Payments of electricity consumers have sharply decreased, and with them the revenues from electricity suppliers for its distribution.

The new rules in the Ukrainian electricity market have worked, despite criticism and fears from experts.

There have been many changes, we have gained a competitive environment where electricity suppliers fight for their customers, improving the quality of services and keeping prices.

First of all, it concerns the regulation of the activities of distribution system operators (SRS), which in the old market model we knew as oblenergo.

In addition, the issues inherited by the “new market” from the “old” market need to be resolved – in particular, the debt of the SRF to Energorynok and the corresponding debt of this SOE to electricity producers.

Quarantine: changes were felt by all

Today we face large-scale challenges.

Due to the quarantine that has been going on in Ukraine for almost 2 months, due to the global coronavirus pandemic, most businesses have faced difficult tests, and some are forced to cease to exist at all.

Payments of electricity consumers have sharply decreased (because the state actually allowed it), and with them the revenues from electricity suppliers for its distribution.

At the same time, SRFs are currently deprived of protection mechanisms and have not received the mirror rights that consumers have received. If the situation does not change, SRFs will be in danger of a serious crisis, which could lead to unpredictable consequences, including for consumers.

If funds are not received in time, distribution system operators will simply not be able to respond in a timely manner to network failures and carry out repairs. For example, power lines were damaged during the recent large-scale fires in the Chornobyl zone, and if it were not for the timely response of the SRF, consumers could be left without electricity for a long time. Fortunately, the situation was quickly resolved and it did not get out of control.

If the resources of distribution operators are limited, any accidents in electrical systems can negatively affect consumers, leaving them without light.

It should be noted that distribution system operators provide jobs for thousands of specialists throughout Ukraine, who are able to support their families during quarantine measures. But if the trend of non-payment continues and sanctions are applied to the SRF, it may leave people without wages.

To prevent this from happening, fines and other sanctions should not be applied to electricity distribution system operators (SSOs) during the quarantine period.

I am convinced that distribution system operators will direct all resources to a reliable and uninterrupted power supply to Ukrainian consumers, but it will be much easier for them to do so if they are given certain concessions, as has been done in relation to other market participants.

“Anticoronavirus” changes

Consolidated solution of existing problems in the electricity market is important not only for distribution operators, but also for all market participants, including consumers.

I want to emphasize that OSRs are not “Geedy Grids”, as some people try to present them. They are not aimed at trying to make money on the problem or get some “compensation”.

I would like to thank # NKREKP for Resolution 766, but it is worth making certain changes that will allow for a smoother and more coordinated quarantine, namely:

1) To extend the terms of implementation of the program of repairs and investment program of 2020 and submission for approval of the Development Plan of the distribution system 2021-2025 only for a period equal to the term of quarantine. No relaxation at work – only a healthy necessity. It is unrealistic to build (reconstruct) power lines remotely. And this will not apply to emergency repairs – all these works will be performed on time and at the proper level.

2) Suspend the application of sanctions to the SRF for missing deadlines for submission of reports to the NCRECP. The problem is not in filing reports, but in gathering information, which is significantly more difficult to quarantine. In addition, it is necessary to minimize social contacts.

3) Settlement of the issue of overdue SRF settlements with PJSC NEK Ukrenergo and acquisition of SRF status by default. SRFs do not give up debts – they will pay them, but it turns out that they themselves do not receive money from suppliers, and those from consumers do not accrue fines, but they are forced to pay fines. This is all about equal treatment of all actors.

And as a separate block, I propose to submit the issue to the Cabinet of Ministers of Ukraine, which we ask to amend the Cabinet of Ministers Resolution №211. The wording of one provision of this resolution (subparagraph 12 of paragraph 2) can create a big problem, as it breaks the chain of payments, so that it is impossible to restore it under current law. And the problem is simply in the wording.

Today it became known that the Government extended the quarantine until May 22. However, sooner or later quarantine measures will be gradually weakened, and then – and completely abolished. So I hope that we will all return to efficient work as soon as possible in the usual mode with minimal losses.



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