By KYIV. May 10 (Interfax-Ukraine) – The National Energy and Utilities Regulatory Commission of Ukraine (NEURC) has launched an investigation into possible illegal actions by a group of energy market participants seeking to obtain economic benefits for DTEK energy holding companies at the expense of financial losses of the state-owned enterprise (SOE) National Nuclear Generating Company Energoatom.
“To start an investigation into violations of the law regarding the functioning of the electricity market, signs seen in the actions of JSC DTEK Zakhidenergo, JSC DTEK Dniproenergo, DTEK Kurakhivska TPP LLC, D.Trading LLC, JSC ECU, SOE Energoatom, Energo-gaz LLC, Energozakhid LLC,” the regulator said in the relevant regulation adopted at a meeting on Tuesday.
According to the decision, NEURC will check the activities of listed companies for compliance with the legislation on the day-ahead market (DAM) and the balancing market for the period from February 1 to April 30, 2023.
As stated in the rationale for the draft resolution, the behavior of these market participants is seen as a possible violation of the law regarding the functioning of the electricity market, in particular, as possible restrictions on competition and/or manifestations of restrictive contractual practices in the market.
“The behavior of these market participants could lead to a significant decrease in the sales volumes of Energoatom (at the DAM), which, as a result, became the basis for the creation of significant volumes of positive imbalance [the sale of Energoatom electricity unsold at the DAM at balancing market according to lower price],” the regulator said in the document.
In the same period, as follows from the NEURC information, applications for unloading DTEK thermal power units with the parallel purchase of electricity at the balancing market by those traders who are part of the same balancing group of JSC ECU together with Energoatom became more frequent.
“It should be noted that during the specified period, Energoatom transferred its financial responsibility for the imbalances to JSC ECU by joining its balancing group. According to the operational information of NPC Ukrenergo, it was found that during the specified period there was a daily increase in commands for balancing energy to unload DTEK’s TPPs,” the NEURC said.
At the same time, as the regulator said, Energozakhid LLC and Energo-gaz LLC, as members of the ECU balancing group, delegated significant amounts of negative imbalances to the responsible party.
At the same time, according to Natalia Karabenko, Head of the Regulatory Support Division of the Legal Support Department of ECU, the company believes that the NEURC decision to conduct an investigation is premature since ECU has not received any requests from the regulator regarding the provision of relevant information or any documents which could have grounds for such a decision.
“We believe that based on the results of the consideration of the documents, there will be enough grounds to believe that this investigation could not have happened,” she said at the meeting.
According to the price caps approved by the regulator that are in force, the electricity cap on the balancing market is 120% of the DAM price, and the bottom price is UAH 10 per MWh.
In turn, the press service of DTEK said that the group strictly complies with the requirements of the current Ukrainian legislation, including legal acts regulating activities in the electricity market.
“According to the specified requirements, all electricity sales of the generating companies of DTEK TPPs are actually fully provided with fuel and operate as usual. Thus, coal stocks stored in the TPP warehouses are enough for more than 50 days of operation. Note that this exceeds all established standards,” the group said.
“We hope for a comprehensive and impartial consideration of the issue raised by the regulator, taking into account the positions of the licensees involved in this process,” DTEK added.
