New PSO mechanism commenced enabling to reduce electricity cost for almost 80% of household consumers
Energoatom, within the deadlines set by the government, has started fulfilling service obligations under the new financial model for providing the public with affordable electricity.
On September 23, the Company auctioned off electricity to universal service providers and distribution system operators.
At the close of trading, 25 universal service providers purchased electricity from Energoatom in the total amount of 1.38 million MWh to supply the public in October 2021 while 27 distribution system operators bought 2.34 million MWh to reimburse for the technological expenses for the fourth quarter of the current year.
A day earlier, the Auction Committee of the Ministry of Energy approved indicative contracts for the sale of electricity between the parties.
Energoatom has timely implemented a set of preparatory measures for the new PSO model to be implemented from October 1, 2021 providing for the transition from a commodity-based mechanism to a financial one for imposing service obligations and reducing the price of electricity for almost 80 percent of household consumers. The relevant changes were adopted by the government on August 11, 2021.
Due to the new PSO mechanism, state-owned electricity producers became entitled to sell all their products on an arm's length basis. The state generation will offset a difference between residential tariffs and the electricity market price by revenue earned.
Energoatom's service obligations under the new PSO model include:
- payment to SE «Guaranteed Buyer» of the service cost for providing the household consumers with affordable electricity;
- sale of electricity to universal service providers operating in the UPS of Ukraine for supply to household consumers;
- sale of electricity to distribution system operators for offsetting their technological costs in the UPS of Ukraine.