380 state-financed organizations in Donetsk Region pay for electricity at an overinflated rate

Thermal power generation04 February 2021

Starting January 1, 2021, state-financed organization in Donetsk Region with a capacity of more than 50 kW, which failed to choose an electricity supplier on the competitive market, became customers of a supplier of last resort (SoLR). As a result, these organizations pay for electricity at an inflated electricity tariff, which is on average 25% higher than the price of electricity suppliers in the free market. Selidovsky City Council Education Department, Dobropolsky District Administration Education Department are among them.

380 state-financed organizations in Donetsk Region have not chosen a suitable supplier on the free electricity market starting January 1, 2021, because they did not implement tender procedures to select a supplier in a timely manner. According to the requirements of the Law "On the Electricity Market", they became customers of a supplier of last resort (SoLR). However, they cannot be their customers for more than 90 days. At the same time, the tariff for electricity from the supplier of "last resort" is on average 25% higher in comparison with other suppliers* Note that 1,165 state-financed organizations in Donetsk region have already chosen a supplier on the free market.

The distribution system operator, DTEK Donetsk Grids, is concerned that a significant number of state-financed organizations failed to choose an electricity supplier on the free market timely. Based on the two-year experience in the new electricity market, the company is afraid that the state-financed organizations will run into debts caused by the SoLR tariff. In turn, the debts can cause the power supply to be cut off both at the initiative of the last resort supplier and the distribution system operator.

In order to buy electricity from an independent supplier on a free market at a market price, all state-financed organizations should conclude an agreement on the electricity supply at free prices. Customers can choose an electricity supplier on the DTEK Donetsk Grids website or on the NEURC website. After selecting a supplier, they should contact the selected supplier with a list of documents required by the supplier. We underline that the distribution system operator provides the electricity distribution service and interacts with all licensed suppliers on equal non-discriminatory terms.

DTEK Donetsk Grids draws the attention of state-financed organizations that contracts for the electricity distribution and supply (based on the choice of a supplier) and payment for electricity is the requirement set in the Law "On the Electricity Market".

We urge the management of state-financed organizations to complete the procedure of choosing electricity suppliers on the free market (tender procedures) and conclude contracts with them. In addition, budget administrators of these organizations - Donetsk Regional Administration, specialized ministries and departments - should enhance control over paperwork and payment for electricity by subordinate organizations.

*Resolution No. 1698 dated September 9, 2020, "On setting the tariff for the service of a supplier of last resort for IVQ 2020".