Ukrkoks urged the NEURC not to raise Ukrenergo's tariff: Costs should be optimised first

At the same time, Ukrenergo has ways to optimise costs, the application of which will allow it to restrain the growth of the tariff until the end of martial law, according to an official letter from the Ukrkoks Association to the Head of the National Energy and Utilities Regulatory Commission (NEURC) Yuriy Vlasenko, UNIAN reports.
"We appeal to you not to approve the draft electricity transmission tariff increase for 2025 to UAH 665.27/MWh (+26% compared to the current tariff). This increase will result in losses of UAH 1.3 billion for the coke chemical industry. Given the war, the energy and logistics crises, as well as the difficult market conditions for the industry, the tariff increase will have extremely negative consequences for the Ukrainian coke industry," the letter says.
Ukrkoks also drew the Regulator's attention to the critical state of the metallurgical complex, which is the main consumer of coke products.
"Currently, the mining and metals industry is in a deep economic crisis, and therefore will not be able to pay for the increased costs of coke products as a result of the increase in electricity transmission tariffs. It is extremely important to note that the coke chemical plants themselves do not have a sufficient financial margin of safety to cover the rising costs of all inputs," the Association emphasises.
Ukrkoks summarised that an increase in the electricity transmission tariff would put an additional burden on the entire industry and could lead to a decrease in production and serious economic problems in the industry. At the same time, there is a possibility to avoid the tariff increase.
"According to experts, the costs of the transmission system operator for electricity transmission can be significantly optimised. Thus, loan servicing costs should be excluded from the tariff structure. During the war, it is unreasonable to raise the tariff to pay off the principal of loans from previous years. The loans should be restructured to defer payments after the end of martial law," Ukrkoks believes.
According to the Association experts, the amount of financial expenses of the NPC Ukrenergo for paying interest on loans should also be reduced, as the UAH 4.4 billion included in the tariff for interest payments during the war is too heavy a burden for the coke industry.
"It is also necessary to optimise the cost of electricity purchases to compensate for technological costs, as the amount of technological electricity losses of 3 TWh set by Ukrenergo is overestimated. Given the above, Ukrkoks calls on the National Energy and Utilities Regulatory Commission to introduce a moratorium on raising electricity transmission tariffs until the situation in the metallurgical and coke chemical industry stabilises," the letter says.
Besides, on November 22, the Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine) appealed to the NEURC to maintain the current electricity transmission tariff. This was reported by Komersant Ukrainskyi with reference to uaprom.info, which published the relevant letter.
Thus, for cost optimisation in the structure of Ukrenergo’s tariff, the ICC Ukraine experts recommend to finance settlements with ENTSO-E members at the expense of revenues from the sale of access to interstate crossings, rather than by raising tariffs. Also, it is proposed to reduce technological electricity losses by conducting audits of grids and preventing abuses, instead of increasing the compensation cost for them from UAH 12.3 to 14.3 billion. Another recommendation given by the ICC Ukraine is the reduction of the discount on the cost of electricity for households from RES (from 22% to 20%), as well as the revision of the volume of projected generation for 2025.
As reported earlier, the National Energy and Utilities Regulatory Commission (NEURC) has published a draft resolution to increase the electricity transmission tariff by 25.8% – to UAH 665.26/MWh in 2025.
Among the reasons for such an increase, the NEURC cites the need to increase salaries at Ukrenergo and make loan payments. At the same time, restructuring of Ukrenergo's loans could reduce the burden on consumers and avoid a significant increase in tariffs, energy experts say.