Cities revolted against the Energy Regulator

Despite all the statements about the course towards decentralization and strengthening the role of local communities, unfortunately we often see absolutely reverse decisions of the central bodies of executive power, where on the one hand cities are given something, on the other – twice as much is taken away. Ruslan Sydorovych analyzes the recent decision of the National Commission on energy regulation.
One of the most striking examples was the decision of the National Commission for State Regulation in Energy and Utilities (NCSREU), due to which in March of this year, the cost of night exterior lighting in cities and villages was raised 2.5 times. Back at the beginning of this year “Samopomich” raised the issue of illegality of the decision and the need for its abolition.
This call was supported by a large number of towns and cities. As of today the lawsuit to invalidate the decision, which is being considered by the Administrative Court of Kyiv, has been signed by 18 Ukrainian cities, including such cities as Dnipro, Lviv, Vinnytsia, Kyiv, Zaporizhia, Chernivtsi, Rivne, Kirovohrad, Mykolaiv, as well as a number of regional centres throughout Ukraine.
This proves the fact that this issue is topical for absolutely all localities of the country, because an unplanned increase in night lighting for our cities and villages means one of the two things – either the need to allocate additional funds from the budget for these goals, and therefore no possibility to use them for other goals, including social ones, or dark streets, and this at least leads to a growth of the still significant level of crime. However, common people may come up with a question whether a public authority could make an illegal decision? It turns out that it could…easily!
In a nutshell, that’s why the decision is illegal.
1. The current regulator (i.e. NCSREU) made amendments to the Resolution of the National Electricity Regulation Commission from 22.10.2004, despite the fact that it is not its successor, moreover, the old body – NERC – has not been eliminated!
2. It is hard to imagine, but NCSREU is a body set up in defiance of the Constitution, because the President does not have the power to create market regulators! Moreover, consideration of the law on an independent regulator of the electricity market in the Parliament confirms the fact that such structures can be created only by laws and not by decrees of the President.
3. The very reason for existence of such regulators in developed countries actually lies in their independence, which allows consumers to receive high-quality services at a reasonable price. Meanwhile, we have an “independent” regulator which makes decisions pursuant to subparagraph 2 of paragraph 3 of an extract from the minutes of the meeting of the Cabinet of Ministers! This is mere absurd!
4. Moreover, there is a direct violation of the budget legislation, namely of the Budget Code of Ukraine, as it is not allowed to make decisions that affect the local budget figures without identifying the sources of funds allocated by the state for these expenses. (It should be noted that tariffs for night lighting were increased after all the local budgets of the country for 2016 had already been approved taking into account the previous tariff rates).
5. And finally. If developed countries stimulate higher nighttime electricity consumption, which is in excess, up to the establishment of zero-tariffs, in our country it is vice versa – the tariffs are increased which creates conditions for overload of our electric power system.
That is, the public authority’s decision is not only illegal, but frankly harmful and dangerous for the country as a whole, and it adversely affects local budgets. Therefore, it remains a great mystery what the intentions of Mr. Vovk, chairman of NCSREU, was when he signed this decision.
The next meeting on the case will be held on October 20. Well, let’s see whether or not Ukrainian Themis is able to protect our cities from the tyranny of the central government.

Ruslan Sydorovych
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