Although “The concept of the most simplified and transparent procedure of connecting electricity-generating equipment (objects) to electricity supply networks” published on the National Commission for State Regulation of Energy and Public Utilities (hereinafter – NKREKP) website provides a range of progressive innovations, it carries risks of a significant increase of connection costs for customers.
The Better Regulation Delivery Office (BRDO) experts have analyzed the Concept. Generally, the approaches outlined by the regulator are based on the principles and rules worked out by the working group of the Verkhovna Rada Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety and expert organizations. However, some issues covering the final cost estimation methodology are not explained in the Concept. According to professionals, this approach does not allow to speak about accuracy and transparency when determining connection costs for customers and remains certain corruption risks related to the monopolized market of connection to electricity supply networks.
According to experts, another drawback of the NKREKP Concept is that the decision on possible refunding for customer’s actual connection costs by a power supply company moves from working group’s proposals to creating a linear component.
Summarizing the results of the analysis, experts point out that “The concept of the most simplified and transparent procedure of connecting electricity-generating equipment (objects) to electricity supply networks” from NKREKP carriers the risks of:
- Incorrect and non-transparent mechanism to determine the final cost of connecting to electricity supply networks;
- Possible growth of the cost of connecting to electricity supply networks for customers;
- Increasing financial burden for business.
The experts frequently appealed to NKREKP to provide preliminary cost calculations according to the published “Concept of the most simplified and transparent procedure of connecting electricity-generating equipment (objects) to electricity supply networks”, but the national regulator has not provided these calculations yet.
In view of the abovementioned, BRDO experts cannot support the Concept proposed for consideration by NKREKP despite many positive and progressive moments.