Photo: Hayat Estate LLC
Everyone has heard about debts in the energy sector, in particular in the electricity market. But today in the war conditions there is a background for its even greater increasing by the electricity consumers.
The fact is that now an electricity consumer who has accumulated a debt to the supplier, has the opportunity not to pay and to change over a new supplier. The Retail Market Rules (the main document that defines the relationship between the consumer and the energy supplier) leave the possibility for the distribution system operator (DSO) to change the supplier of electricity for a consumer who has already received a request from the previous supplier for disconnection.
If the previous supplier has already applied to disconnect the consumer, it means that the latter has debts that must to be paid, and only after that may change for a new supplier or stay with the current one. It comes that the consumer may accumulate debts to one supplier, may change over another one, accumulates debts again, and again goes to look for a new supplier, leaving the previous one with debts. Thus, debts will accumulate for various companies, and suppliers will not have the opportunity to influence this process by disconnecting an unscrupulous consumer.
The legislation wording, which gives the DSO company the option to choose – that is the option to agree changing a new supplier (with existence debts for the previous one), in today’s conditions simply leads to abuse by consumers and puts suppliers in unequal conditions. The consumer can “jump” from supplier to supplier, generating debts and not having responsibility.
Problems and shortcomings in any field of activity originate from the regulatory and legal framework. The current version of the rules provides such an opportunity to the consumer, because it says that the operator of the distribution system “may refuse”, which means that it can also allow. The lack of categoricalness in the wording in the Retail Market Rules does not solve the problem, but only creates a debt problem in wartime conditions.
I am convinced that while the main normative document contains the wording with the word “may”, there is still background for manipulations and distortions by market participants. In practice, our company has encountered the following problem: the electricity consumer for which my company is a supplier, did not pay the amount according to the actual calculations for last three months. After receiving the approval of the military administration (as required by the currently existing order of the Ministry of Energy of Ukraine), the distribution system operator was contacted by us to disconnect such a consumer. The disconnection occurred, however, 10 days after that, DSO sent a notice of approval of the change of supplier for such consumer. And here obvious questions arise: did the DSO have the right to approve the change in such situation, how fair is a decision in relation to the current supplier?
Without resorting to speculations on the topic of war in Ukraine, it is still worth emphasizing the catastrophic lack of the floating assets of suppliers companies and total debts of consumers. And it comes that today’s essentially the only lever of influence on the consumer through the disconnection procedure also turns out to be ineffective, since the DSO can nevertheless accept the agreement to change the supplier interpreting the provisions of the Retail Market Rules (clause 6.1.14, sub-paragraph 3)!
In order to prevent such cases, The National Commission for State Regulation of Energy and Public Utilities should define clear criteria for changing suppliers, avoiding non-categorical meanings of words such as “may”, in particular, should give a clear wording regarding the impossibility of changing the electricity supplier if the consumer has already been disconnected from the electricity supply after the initiative of the current supplier. Delaying such an amendment leads to distance for the domestic electricity market to the European ambitions, leaves some of its participants in unequal conditions, and only increases debts in the industry.
