{"id":66766,"date":"2017-02-03T18:46:37","date_gmt":"2017-02-03T18:46:37","guid":{"rendered":"http:\/\/uacrisis.org\/?p=52203"},"modified":"2017-02-04T15:48:12","modified_gmt":"2017-02-04T13:48:12","slug":"52203-postanova-nkrekp","status":"publish","type":"post","link":"https:\/\/uacrisis.org\/en\/52203-postanova-nkrekp","title":{"rendered":"New Energy Regulator\u2019s decision on the price of connection to electricity network must be cancelled \u2013 experts, MPs"},"content":{"rendered":"<p><a href=\"https:\/\/www.youtube.com\/watch?v=1mF4pnW3ZcI\" target=\"_blank\" rel=\"noopener\">WATCH IN ENGLISH<\/a><\/p>\n<p style=\"text-align: justify;\"><em>The provision of the National Commission for State Regulation of Energy and Public Utilities establishing new prices for connection of a new consumer to electricity networks is absolutely unacceptable and should be revised, as the price is unfounded and too high. This decision poses threat to investment climate and national economy in general, said experts, MPs and representatives of local authorities at a discussion at Ukraine Crisis Media Center. <\/em><\/p>\n<p style=\"text-align: justify;\"><strong>What\u2019s wrong with the formula and calculation<\/strong><\/p>\n<p style=\"text-align: justify;\">According to Lev Pidlisetsky, MP from \u201cSamopomich\u201d faction, the Commission arbitrary used the provisions of law related to the formula of price calculation. \u201cNo one could imagine that they could assess assets in such way as they did, and no one could suppose they would not use any decreasing coefficients,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">The first problem is the lack of transparency in assessment of assets of \u201coblenergos\u201d, regional energy supplying companies (assets value is the numerator in the formula). For instance, the value of \u201cDniprooblenergo\u201d assets was assessed as UAH 6,2 billion in 2015. Then the State Property Fund of Ukraine reassessed it according to a new methodology, and assets value plummeted to UAH 13,4 billion in 2016, but there were no any significant changes inside the enterprise, said Andriy Gerus, former member of the National Regulatory Commission. The second problem is that in several \u201cdepressive\u201d regions there are power lines that do not function at all, however, they were also considered as assets in the assessment procedure. As a result, the calculated price for connection to electricity networks in these regions is two times higher than in Kyiv or Dnipro.\u00a0 \u201cThis is contrary to what we actually needed to have: the connection is very expensive in the regions where we should encourage businesses, but it is cheap in Kyiv center where the networks are overloaded,\u201d explained the expert.<\/p>\n<p style=\"text-align: justify;\">In addition, it is strange that formula denominator is not the power of the consumers according to their contracts, but the transformer capacity; that energy producing enterprises will be connected on the same conditions as other consumers, that new public schools and kindergartens will have to pay the same price as businesses.<\/p>\n<p style=\"text-align: justify;\">The established price of connection is now six times bigger than before. Moreover, it doesn\u2019t include the cost of construction of a line connecting the object to the existing line. \u201cThis situation looks exactly as if you had to build a shop for the vendor to buy his goods,\u201d noted Oleksiy Orzhel, director of Energy Section at Better Regulation Delivery Office. The experts added that the new tariff looks like an attempt to legalize \u201ccorrupt tax\u201d \u2013 money which formerly were given to the \u201coblenergos\u201d as bribes.<\/p>\n<p style=\"text-align: justify;\">\u201cThere are both technical and legal inconsistencies in this formula. The Provision has not been published yet, but if it is published, we will take legal action. There are solid grounds\u201d said Andriy Gerus.<\/p>\n<p style=\"text-align: justify;\"><strong>A threat for investors and green energy<\/strong><\/p>\n<p style=\"text-align: justify;\">A sharp increase of cost of connection will have serious negative impact on industry and small-scale power generation enterprises, especially green energy producers. It will lead to suspension of ongoing investment projects and will discourage foreign investors. \u201cNow the cost of connection constitutes up to 30 per cent of the project budget, instead of 10 per cent. Moreover, this money is paid not as a tax to state budget, it is paid into the pocket of another business,\u201d stressed Sergiy Petrov, member of the Union of Urkrainian Entrepreneurs.<\/p>\n<p style=\"text-align: justify;\">\u201cThis new price creates an obstacle for investments willing to enter this sector, while Ukraine needs to get rid of these obstacles. It is completely contrary to the principles declared by the Government. If we don\u2019t change it, we will never build a strong economy and will always depend on IMF loans,\u201d stressed Victor Halasiuk, MP from Oleg Lyashko Radical Party. \u201cWe will analyze the results of assessment [\u2026]. I have already issued a request for this information and we will initiate independent expertize,\u201d he added.<\/p>\n<p style=\"text-align: justify;\"><strong>An<\/strong> <strong>obstacle<\/strong> <strong>for<\/strong> <strong>territorial<\/strong> <strong>communities<\/strong> <strong>development<\/strong><\/p>\n<p style=\"text-align: justify;\">According to Dmytro Zhyvytsyi, representative of Sumy Regional State Administration, the Provision would thwart development of new-created united communities. For instance, construction of premises for a new-created agricultural cooperative will become much more expensive. As a result, the idea itself becomes less attractive.<\/p>\n<p style=\"text-align: justify;\"><strong>Experts<\/strong> <strong>and<\/strong> <strong>entrepreneur call to review the decision<\/strong><\/p>\n<p style=\"text-align: justify;\">Experts of the Reanimation Package of Reforms in their official statement express their concerns and call to review the decision, taking into the account concerns of all parties. They also remind that it is necessary to start rotation of Commission members. \u201cIf we don\u2019t have independent decisions, there is no sense to talk about further reforms in energy sector and electric energy market,\u201d the statement stresses.<\/p>\n<p style=\"text-align: justify;\">Maksym Sysoev, co-chairman of European Business Association Fuel &amp; Energy Committee, said that the UBA is also deeply concerned with the Commission\u2019s decision and prepares the address to the Prime Ministers and the Commission.<\/p>\n<p style=\"text-align: justify;\">According to Denys Marchuk, representative of agribusiness associations, new rules would create significant obstacles for processing enterprises. Nine associations have already addressed a letter to the President and the head of the Commission.<\/p>\n<p style=\"text-align: justify;\">Participants of the discussion also noted that in the future all the details should be included into the text of the law in order to reduce the risk of malpractices.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>WATCH IN ENGLISH The provision of the National Commission for State Regulation of Energy and Public Utilities establishing new prices for connection of a new consumer to electricity networks is absolutely unacceptable and should be revised, as the price is unfounded and too high. This decision poses threat to investment climate and national economy in [&hellip;] <a class=\"g1-link g1-link-more\" href=\"https:\/\/uacrisis.org\/en\/52203-postanova-nkrekp\">More<\/a><\/p>\n","protected":false},"author":17,"featured_media":66767,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":[],"categories":[765],"tags":[1659,862,6162,2002,2003],"section":[648],"form":[31956],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Energy Regulator\u2019s decision on the price of connection to electricity network must be cancelled \u2013 experts, MPs  | UACRISIS.ORG<\/title>\n<meta name=\"description\" content=\"https:\/\/www.youtube.com\/watch?v=n5ynbfbQ5fI WATCH IN ENGLISH The provision of the National Commission for State Regulation of Energy and Public Utilities | Uacrisis.org\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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