Ukrainian companies protest proposed 35% hike in base electricity tariffs
The head of the NEURC Kostiantyn Ushchapovskyi (Photo: NEURC)

The National Energy and Utilities Regulatory Commission (NEURC) plans to increase price caps on the electricity market by 35% starting June 30, according to the draft decision, which the members of the commission tentatively approved on Thursday.

The project under consideration by the commission provides for the establishment of new limit prices for the day-ahead market and the intraday market at the following level:

→ upper – UAH 2,706.63 ($73) and UAH 5,413.26 ($146) per MWh for hours of minimum (23:00 – 07:00) and maximum (07:00 – 23:00) load.

The minimum marginal price for the day-ahead market will be UAH 10.00 ($0.27) per MWh.

For the balancing market, the maximum marginal price will be 125% of the day-ahead market price, the minimum price will be UAH 0.01 (0.00027$) per MWh.

Business representatives who were present at today's meeting asked the NEURC not to raise the limit prices. They believe that this will lead to an increase in electricity costs.

"We understand that this is the way to increase prices on the market. Our company will simply stop. Although we are now unprofitable, we still decided to work, but the new level of losses due to the increase in the price of electricity will lead to a halt," warned the Director of Economics and Finance of Nikopol Ferroalloy plant Oleksandr Zavhorodniy.

Maksym Musatov, chief energy engineer of the Zaporizhzhya Ferroalloy Plant, told the commission that the increase in marginal prices could lead to an increase in the company's electricity costs by UAH 43 million ($1.2 million).

Pavlo Litun, the chief energy engineer of Pokrovsky Mining and Processing Plant, said that his company repeatedly appealed to the National Energy and Utilities Regulatory Commission of Ukraine with a proposal not to raise the maximum prices during the war. "Our proposal is to leave the price caps at the level of 2022," he said.

On May 31, the NEURC canceled the "wartime" price caps that had been in effect since the beginning of Russia's full-scale invasion in 2022 from the end of June:

→ lower – UAH 1,378.97 ($37) and UAH 2,646.25 ($72) per MWh for hours of minimum and maximum load;
→ upper – UAH 2,000 ($54) and UAH 4,000 ($108) per MWh for hours of minimum and maximum load.

On May 30, the Cabinet of Ministers raised tariffs for electricity for the population almost twofold – to UAH 2.64/kWh ($0.07).