Donbasenergo appeals discriminative decision of power regulator

Power GenCo Donbasenergo (DOEN UK) asked the Energy Ministry to facilitate the cancellation of the resolution of the state power regulatory commission that it alleges discriminates against the company, according to a Feb. 4 report by the Interfax news agency. On Feb. 3, the commission published its resolution that ceases payments by the state wholesale market operator for electricity produced by power units located on Ukrainian territory beyond the government’s control. Therefore, payments were ceased to Donbasenergo’s Starobesheve thermal power plant (TPP), located on terrorist-occupied territory.

The company’s other TPP in the Donetsk region is based in the town of Sloviansk, which is under government control. The Sloviansk TPP was damaged by terrorist attacks in June 2014 and it’s now working at 10% of its capacity of 880 MW. Afterwards, the Starobesheve TPP (installed capacity 1,975 MW) became the firm’s main generating station, generating 98% of the company total electricity in 2H14 (73% in 1H14). Sloviansk TPP was occupied by terrorists in May 2014 and was freed in early July. Starobesheve TPP was occupied by terrorists in September 2014.

In its appeal, Donbasenergo argued that it’s still supplying electricity to Ukraine’s energy system and deserves to be paid for it. Moreover, the company stresses that it is registered in Kyiv and paying taxes there.

Alexander Paraschiy: With the Sloviansk TPP damaged and payments lacking for the power produced by Starobesheve TPP, the generator of more than 90 percent of the company’s revenue, Donbasenergo is a totally insolvent company. We believe that power sector regulators will study the issue and change their regulation, which we view as discriminative. Though, even without these regulatory follies, the current situation in the Donetsk region makes Donbasenergo a very risky company for any investor.