Energy Secretariat, WB Propose Ukraine PSO Act

The Energy Community (EC) secretariat and the World Bank have submitted to the Ukrainian authorities a new draft public service obligation (PSO) act for the natural gas sector, in order to reform "the existing non-compliant scheme." 

Together with the lack of unbundling of the transmission system operator, the EC secretariat says that Ukraine’s current PSO scheme presents the biggest obstacle to gas market reform by maintaining a monopoly position of the incumbent gas suppliers. The new obligation is aimed at securing natural gas supplies to the most vulnerable categories of customers, while enhancing market competition, and ensuring that customers can change supplier in line with the Energy Community precedent (its 'gas acquis').

In its opening letter, the secretariat took the preliminary view that PSOs imposed on subjects on the natural gas market by the Ukrainian cabinet's Resolution No 187 of March 22 2017 "do not comply with the Energy Community acquis communautaire on natural gas."

The Energy Community regroups all EU countries, with non-members in the Balkans and southeast Europe, the largest of which is Ukraine.

Ukraine's energy ministry had no related statement on its website; August 24 was a national holiday. Nor did Naftogaz, though it said August 23 that debts owed it by gas customers (typically power and district heating generators, plus direct industrial customers) had been reduced to 30.2bn hyrvnia ($1.17bn), a reduction of 0.9% on the previous week.

Mark Smedley