NEURC will postpone the introduction of the fee for zero imbalances in natural gas market for one year

National Energy and Utilities Regulation Commission (NEURC) plans to postpone the introduction of a mandatory fee for zero imbalance in the natural gas market for a year - until January 1, 2023. The relevant resolution will be adopted at NEURC’s meeting on September 2, 2020, according to the agenda of the meeting. Today, the zero imbalance fee is calculated by the GTSOU for its customers of natural gas transmission services each month and is published on the information platform by the 21st day of the following month. Payment must be made once a year, until January 1 of the year that follows.

At the same time, the GTS Code provides for the gradual introduction of zero imbalance fee: the first stage is applied until the 2019- 2020 gas year, the second and third stages, 2020-2021 gas year and 2021-2022 gas year, respectively. For the 2019-2020 gas year, the zero imbalance fee is informative, and is not for any charge. The second and third stages provide for mandatory collection in favor of the GTSOU or payment by GTSOU to customers for zero imbalance.

According to the results of the analysis of the zero imbalance fee conducted by the NEURC, a number of shortcomings and discrepancies were in the calculations made by the GTSOU. In particular, the GTS Code and the Gas Storage Code stipulate that the GTSOU may use gas storage capacity for physical balancing. However, the GTS Code does not provisions that related costs be a base to levy a zero imbalance fee. Moreover, Regulation No 312/2014 stipulate that prices on the trading platform, which is pre-determined by the GTSOU and approved by the NEURC, are used to calculate an imbalance fee. At the same time, the requirements of the Law of Ukraine “On Public Procurement” regarding the obligation of GTSOU to purchase natural gas volumes to balance the gas transmission system through a tender procedure make it impossible to purchase gas on the trading platforms, and use the price cited on the platform to calculate daily imbalances.

Taking into account the existing problematic issues, the NEURC continues the first stage of the introduction of the zero imbalance fee for one year. Thus, the zero imbalance fee in the 2020-2021 gas year will also be purely informative and will not be charged.

After the entry into force of the resolution, the first zero imbalance fee will have to be paid by customers of transmission services by January 1, 2023, for the gas year 2021-2022.

17:14 / 7 September, 2020

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