440 budgetary organisations in Donetsk Region are at risk of being left without an electricity supplier from a competitive market starting January 1

Thermal power generation30 December 2020

Starting January 1, 2021, budgetary organisations in Donetsk Region with a capacity of more than 50 kW need to choose an electricity supplier on their own in the free market and conclude contracts for the electricity supply. Those who fail to do this before the beginning of 2021 will become customers of a Supplier of Last Resort (SoLR), which will entail a 25% higher electricity tariff.

Since January 1, 2021, 440 budgetary organisations in Donetsk Region run the risk of not having time to choose a cost-efficient supplier on the free electricity market, since they did not conduct tender procedures to select a supplier. This is associated with the new rules for the electricity market*. According to the requirements of the Law "On the Electricity Market", they will be obliged to become customers of a supplier of last resort (SoLR). They can cooperate for no more than 90 days. At the same time, the electricity tariff from the supplier of "last resort" is on average 25% higher in comparison with other suppliers**. It is worth noting that 1115 budgetary organisations have already chosen a supplier on the free market across Donetsk Region.

DTEK Donetsk Grids is concerned that a significant part of budgetary organisations did not conduct tender procedures to choose a supplier, and may become customers of SoLR. Based on two years of experience in the new electricity market, the company believes that the SoLR tariff may cause budgetary organisations to have electricity debt. In turn, the debt can cause the power supply to be cut off both at the initiative of the supplier and the DSO.

In order to buy electricity from an independent supplier on the free market until January 1, 2021, all budgetary organisations should conclude an agreement on the supply of electricity at free prices. It is possible to choose an electricity supplier on the DTEK Donetsk Grids website or on the NEURCU website. Then contact the selected supplier with a list of documents determined by the supplier. We emphasize that the distribution system operator provides the electricity distribution service and interacts with all licensed suppliers on equal non-discriminatory terms.

DTEK Donetsk Grids calls the budgetary organisations attention that the availability of contracts for the electricity distribution and supply (based on the selection of a supplier) and payment for electricity is a requirement of the Electricity Market Law. We urge the management of budgetary organisations to conduct tender procedures timely, and conclude contracts with new electricity suppliers. And the budget administrators of these organisations - the Donetsk regional administration – shall monitor the paperwork and payment for electricity by subordinate organizations.

*Starting January 1, 2021, clause 7 of the Rules for the Retail Electricity Market and clause 13 of the Law "On the Electricity Market" become invalid, which gives the right to budgetary organisations, regardless of the size of the contractual capacity, to buy electricity from a universal service provider. Starting January, the budgetary organisations should conclude contracts at free prices on the electricity market either with existing suppliers or choose a new supplier. Those who do not choose a supplier timely, according to the Law "On the Electricity Market", will become a customer of a supplier of last resort (SoLR).

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