Ukraine electricity regulator asks for legislation to unblock its work

27 November 2017

Ukraine’s electricity and utility regulator, the NERC, was not able to meet a quorum of four commissioners last week to adopt decisions needed for the sector. As one of the four commissioners has been absent from the meetings since Nov. 13, the regulator wasn’t able to adopt 154 decisions, including approving utility rates, granting licenses and adopting secondary legislation, according to a Nov. 24 presentation posted on the NERC website. To unblock its activity, the NERC has proposed to amend Ukrainian legislation, possibly to reduce the quorum.

 

Recall, the tenures of three (out of seven) NERC commissioners expired in May 2017, with no replacement, leaving the regulator with only four valid commissioners (amid a quorum of four). Yet one of these four commissioners has not signed up for the regulator’s meetings since Nov. 13, blocking its work. On Nov. 26, the tenure of two of these four NERC commissioners expired (among them the one who hasn't been showing up), making quorum impossible. The election procedure for new commissioners (a process that takes at least 75 days, by law) has just started, meaning the NERC will get a quorum no earlier than February.

 

Alexander Paraschiy: Uncertainty around the NERC adds risks for DTEK Energy (DTEKUA), which is awaiting a new regulation that will effectively boost prices for its thermal power plants as of January 2018 (that regulation should be adopted ten days ahead of the new year).

 

So far, the risk that new rates will not be adopted is low, given that blockage of the NERC is very risky for Ukraine’s entire energy system. We expect Ukrainian power brokers will find some solution soon, enabling all the pending regulations to be adopted by the end of the year.