No “market power” in DTEK! They will just tell you the price.

There is no “market power” in DTEK! Whatsoever! They will simply tell you the price and carefully threaten with the collapse of the electrical system.

I provided the Anti-Monopoly Committee of Ukraine with a transcript of the hearings of the Committee on Fuel and Energy Complex dated April 8, 2015.

This document clearly demonstrates the influence of DTEK in the electricity market and how discussions are conducted by the managers of this company with government representatives.

As for the time when the hearing was conducted – it was 13 days prior to the rally of miners demanding the resignation of the then Minister of Energy, 16 days before Mustafa Nayyem published the evidence of DTEK’s “Fortetsia” plan,  and 11 months before “Rotterdam+”.

As they say, manuscripts do not burn, and now it is very curious to review some interesting quotes from this event.

Dmytro Vovk, Chairman of the National Commission for State Regulation in Energy and Utilities, p. 4

“I would like to emphasize the following. In 2014, the average tariff of thermal power plants amounted to 74-86 kopiykas without VAT. In the structure of the tariff, the cost of coal is 70 percent, the price of coal during 2014 increased from 700 hryvnias in January to 1 thousand 100 hryvnias at the end of the year. If we compare tariffs, compare the growth of tariffs ……… (not audible) … then the situation is as follows: coal has grown by 60 percent ……. thermal power plants by 53 percent, the producer price index in 2014 – by 31.8 …….. – by 25.7.

At the same time, according to the State Statistics Service, the salary of miners decreased by 4 percent.”

Reasonable. As we see, in 2015, Dmytro Vovk was well aware that these were not miners who were the real beneficiaries of the coal price increase; the problems of miners were just used as a cover.

Maksym Tymchenko, General Director of DTEK, p. 10

“Without exaggeration, we have a catastrophic situation in thermal generation today. Neither the ministry nor the regulator understands this.

Because when it is stated that out of 28.5 million tons of coal, which is needed for this year, 17 million tons are mined by “Pavlohradvuhillia” company, which is part of DTEK, and in which we invested more than 1.5 billion dollars to increase the volume of coal production from 10 to 20 million tons over the past 10 years, I would like to say that “Pavlohradvuhillia” does not sell coal for 1,100 hryvnias. The price is one thousand 500 hryvnias. This is the price that you – as a regulator – are obliged to take into your calculations, and not to arrive at theoretical figures. And this price is the lowest compared to any alternative that exists; it cannot be lower.”

Maksym Tymchenko was very straightforward. And very straightforwardly deprived the NCSREU of half pf its powers.

And one more Tymchenko’s quote from the same page:

“And what I’m hearing today – we will import Russian electricity to DTEK – this will not be so. Because by the end of April, the power shortage will be 2 thousand megawatts.

We say that we have lived through the winter because we have gas stations that operate on the basis of gas brand of coal, they had enough coal thanks to “Pavlohradvuhillia”, merging, but today they don’t.

The first station is Ladyzhenska, then Kurakhovska. They switch to a minimum amount of equipment. This means that the power shortage will be about 2 thousand megawatts.

I am saying this to you and to the majority who know what I am talking about. What does this mean? That this deficit can be covered either from Russia – one and a half thousand megawatts – but the Russians will not give such a volume, or will give at an increased rate; or we lose maneuverable power.

And if you need someone to explain what it means to lose maneuverable power in the structure of the energy market of Ukraine and the industry, this is the effect that falls on “Energoatom” and on atomic blocks”.

So on the basis of this transcript, everyone can draw their own conclusions about how great the capabilities of Rinat Akhmetov’s company are in lobbying their own interests.

The November refusal of NCSREU to provide a journalist of “Our Money” program, Yuriy Nikolov, with the copies of the lawsuit to AMCU in the case opened in 2015, is yet another clear indication that in all high offices everybody is perfectly aware that in 2015 there was more than enough evidence of monopoly abuse by DTEK.

I am deeply convinced that the case of possible monopolistic abuse of DTEK is not a matter of lack of evidence. This is an issue of whether the relevant state control bodies are ready to act by the law and, within their authority, maintain order in the energy markets.

A professional, independent anti-monopoly committee that protects the interests of the state and citizens will ensure a strong economy and the success of the whole country and everyone who lives in it.

Viktoriya Vojtsitska
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