The business and community circles continue to discuss new rates for non-standard connection to electricity grids the regulator has introduced recently. Yesterday, for example, the people’s deputies, businesses and experts discussed this topic during the round table devoted to the impact of tariff policy on the industry and economy and initiated by the relevant committee of the Verkhovna Rada. The Energy Sector head Oleksiy Orzhel joined this discussion.
Oleksiy Orzhel gave a variety of reasons why new rates would demotivate the business and investors:
Firstly, non-standard connection rates are too high and economically unjustified.
Secondly, the regulator behaves unpredictably: it voiced certain figures but approved other rates.
Thirdly, the calculation method includes the controversial replacement value of assets of energy-distributing companies, which requires to be checked and justified.
Fourthly, an investor provides installing lines from the regional power distribution company’s grids to own power facilities at his own costs (so-called “linear component”), but then he is forced to transfer them to a regional power distribution company because of its pressure.
According to Oleksiy Orzhel, the assessed replacement value of energy-distributing companies, which was used by the regulator, distorts the investment climate in the country promoting the connection in well-developed regions (Kyiv and Dnipro, where the rates are the lowest) while the regions with less developed energy infrastructure (Poltava , Sumy) lose their chance to attract new investments.
To remedy this situation, the Better Regulation Delivery Office proposes to improve a method of calculating rates or, more specifically, the formula that will allow to determine cost-effective rates by introducing justified indexes (that have not been taken into account previously). In particular:
- To use an economically justified replacement value of a regional power distribution company for calculations after carrying out its thorough audit;
- The non-standard connection rates should be determined for each voltage class, taking into account only the value of fixed assets of a regional power distribution company, which is involved in this voltage class;
- The formula should include the contractual connected capacity (specified in contracts with consumers) instead of the regional power distribution company’s transformer capacity (this will reduce the rates by 2-3 times);
- The formula should include a capacity use rate of transforming sub-stations – it will lead to lower connection rates on the idle infrastructure of a regional power distribution company.
Oleksiy Orzhel believes that there can be other options to determine rates of non-standard connection considered, in particular, on the basis of sampled connection prices or cost estimates of standard connection projects. “If we make this, the rates can be reduced. As a result, the country will receive both the transparent formula and adequate rates,” the expert said.