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Energy regulator members suspected of collusion in approving "Rotterdam plus" formula
Energy,Regulator,  Members,  Suspected, Collusion, Rotterdam

The National Anti-Corruption Bureau of Ukraine launched a criminal investigation suspecting head and members of the National Energy and Utilities Regulation Commission of acting in the interests of generating companies, operators of thermal power plants.

"NEURC officials, acting intentionally in the interests of generating companies, operators of thermal power plants, fulfilling their criminal arrangements, using an unjustified formula for calculation of the cost of energy coal, carried out calculations of the projected wholesale market price of electric energy with the inflated cost of energy coal in the second and fourth quarters of 2017," says the ruling by Solomensky District Court of Kyiv of July 10, 2017, published in the Unified State Register of Judgments.

According to the NABU’s position, such actions by the NEURC led to the fact that generating companies, operators of TPPs received super profits, while consumers of electricity incurred groundless costs.

At the same time, the document directly refers to the "Rotterdam Plus" formula, which led to an economically unreasonable increase in the price of electricity, purchased from generating companies by the state-owned enterprise Energorynok. NABU says that among such generating companies there are Centrenergo, Donbasenergo, DTEK Dniproenergo, DTEK Skhidenergo, and DTEK Zakhidenergo. 

The court's ruling also notes that to continue the investigation, NABU requested that the court warrant temporary access to DTEK Dniproenergo's paperwork on the movement of funds in PUMB Bank. However, the Solomenskiy court rejected the motion. As UNIAN reported earlier, in April 2016, NEURC approved the market methodology for calculating the wholesale price of electricity, based on the European coal price index.

According to the head of the NEURC, Dmytro Vovk, the marginal price for coal began to be formed based on the price (API 2 index), which is determined at trading on the Rotterdam stock exchange, plus the cost of coal transportation to the domestic market (the so-called "Rotterdam plus delivery" formula). According to NEURC, the method of calculation should eliminate manual regulation of prices, ensure independence from supplies from the ATO zone, and relieve Ukraine of the problems regarding the accumulation of a sufficient amount of coal for the passage of the heating season.

At the same time, Prime Minister of Ukraine Volodymyr Groysman repeatedly demanded that the authorities determine the expediency of utilizing the formula. In mid-January, 2017, the Minister of Energy and Coal Industry, Ihor Nasalyk, said that the use of the "Rotterdam plus delivery" pricing formula for the energy coal did not remove the problem of diversifying fuel supplies to Ukraine.

On February 14, former NEURC member Andriy Herus said that thermal generation, much of which belongs to DTEK's energy holding owned by Rinat Akhmetov, additionally earned more than UAH 10 billion due to the inclusion of the cost of coal in the electricity tariff via the said formula.

In mid-February, Prosecutor General Yuriy Lutsenko said that the Prosecutor General's Office will verify the legitimacy of the "Rotterdam Plus" formula’s application.

Earlier One Ukrainian soldier killed, two injured in Donbas

More news Topics Kiev
MORE + Source: unian.info
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