Energy experts, NKREKP representatives: Consumers and their interests should be the focus of attention


Kyiv, October 21, 2016. The main task of the state to protect the rights of heat and electricity consumers is to develop a clear algorithm for handling complaints and effective ways for the regulator to influence the companies that violate the rights. The monopoly companies, in their turn, must become “businesses with a human face” to move to a new model of energy market which is supposed to work as a result of reforms. This opinion was expressed by energy experts at a discussion held at Ukraine Crisis Media Center.

Consumers and their interests should be the focus of attention

“I think that when carrying out reforms, we thought about the country, the industry, the company – anything but the consumer,” stated Ivan Plachkov, head of “Kyivenergo” Supervisory Council, ex-Minister of Energy and Coal Industry of Ukraine. According to him, electricity and heat consumers, as well as businesses and the population are currently almost helpless against monopoly companies. This concerns not only the absurd procedure for connection of new consumers to the electric network, but also the opportunity to complain about the company’s actions in case of low quality. “The system should be more clear and effective, and it is necessary to start with the consumer. We need to develop a clear algorithm for handling complaints and resolving problems,” he said.
Leverage “from above”: fines

Iryna Osovyk, deputy head of the Department on Electric Energy Retail Market, National Commission for state regulation in the energy and utilities, noted that under the law on a national regulator, it is responsible for reviewing consumers’ complaints and extrajudicial dispute resolution.

The new complaints procedure will ensure the more advantageous situation for a consumer. First consumers will resolve disputes with service providers or suppliers, and only then they will turn to the NKREKP or court. The Commission has already been working on the relevant resolution. Besides, the regulator proposes to levy fines on the company, if at the stage of considering the complaint at the NKREKP the decision is taken in favor of the consumer. “If the company knows that it bears a financial responsibility for the poor qualities of services, all issues will be addressed at the stage of a consumer appeal to the company. This will reduce both the time of examination and the number of appeals to the NKREKP, State Energy Supervision and Antimonopoly Committee,” noted Iryna Osovyk.

She also reminded that the market will soon face the division into suppliers and distribution companies. “I hope there will be a sufficient number of suppliers over time, and consumers will be able to choose,” she noted.

An energy ombudsman can become a positive agent of changes in this area, if the relevant law is accepted.

Leverage “from below”: public discussion

Serhiy Titenko, former head of NKREKP, noted that in earlier years of the regulator operation a public examination of complaints in the presence of the media was an effective leverage. “Transparency and publicity are very serious things. They lead the companies to think about the consequences if the problem becomes known. […] The adopted law on a regulator also provides for a public discussion of the investment program. There should only be a clear mechanism for mandatory public consultation with small and large businesses, regional and village councils, as well as a mechanism of summing it up. Then the NERC will reject this investment program; there will be a major scandal, and responsibility will appear,” he believes.

The management of “Kyivenergo” and “Ukrenergo”: the monopolists are ready to change the rules of the game

The representatives of the monopolists stated that they are aware of the problem and the need to change the rules of the game. “The situation with heating, hot water and electricity is a very problematic area and the number of these problems is growing. […] We should move away from super-monopolism. Each company should perform its functions,” stated Yevhen Bushma, Commercial Director of JSC” Kyivenergo. ”

He noted that now the company is trying to switch to online servicing, and supply and transmission have already been divided in order to make life easier for both consumers and   employees of the company.

“Ukrenergo” is also being reoriented to focus on the consumer, said Mykhailo Bno-Airiyan, newly appointed Director of Communications and International Cooperation of “Ukrenergo”, ex-head of Strategic Planning and European Integration Department, Ministry of Energy and Coal Industry of Ukraine

“Working with business should be transparent and understandable. Our task is to show that the transportation tariff is transparent, that we use effectively and consistently the funds received from consumer tariffs,” he stressed. Mykhailo Bno-Airiyan added that the company is actively engaged in preparing for the transition to the new market model. “We will try to make our company with a human face,” he assured.