Dnepropetrovsk Territorial Union Organization of coal-miming industry of Ukraine is notifying of situation in the energy sector of Ukraine which the stable work of Western Donbas mines depends upon.

Power import

1. The Minister made a criminal contract for the power import from Russia. This is a humiliating agreement in terms of conditions and in reality handing over interests of the country and our interests – power specialists and mine-workers.

2. The Ministry of fuel industry along with the National Committee Economy Administration destroys the power industry of Ukraine. They set up a power rate of 0.72 kopecks for Ukrainian Thermal Power Plants, and buy power at 0.86 kopecks in Russia.

3. The Minister signed, that with prejudice to the interests of Ukrainian Thermal Power Plants (TPP) and coal mines, we will purchase power from Russia not only in period of acute need but also for the whole year – in spring, summer and autumn.

4. If we decline to purchase Russian power, Ukraine will bear losses more than 2 billion UAH. Such are the contract conditions.

5. Power import from Russia contract will bury Ukrainian power. It will stop the thermal generation there is nowhere to burn Ukrainian coal that results in unemployment for mine-workers and power specialists during 1 – 2 years.

6. In January this year, when power import from Russia started, TPPs did not purchase more than 100 000 MT of Ukrainian coal “G” type. There is no mining, there are no wages. 

7. Wage debts at the state owned companies have grown up because the state owned company “EnergyMarket” does not pay the thermal generation and so mine-workers do not get their wages. Debts in the energy sector have been accumulated.  “EnergyMarket” is in debt of 16.3 billion UAH to generating companies of Ukraine. The Ministry of Power and Mining Industry does nothing to resume payments.

• On New Year’s Eve (29 December 2014) the state owned company “UkrInterEnergo” made two following agreements in Moscow: the first is to import power from Russia to Ukraine, and the second – to supply power to the Crimea.

• Power import was given priority to domestic generation.  

• These agreements are economically non-value-added for Ukraine, and moreover they contain a number of paragraphs which contradict to the state interests.  This contract is similar to the “gas agreement” which currently is in force and was signed by Yulia Timoshenko. For instance, there are some following conditions in the contract:

1. Power supply price was not fixed and can change unilaterally by Russian part. The price for power supply to the Crimea was fixed and can’t change without concurrence with Russia.  This is a fragrant violation of equal conditions that in reality makes the Ukrainian part be dependent entirely on the Russian solution on the contract economy.  

2. Power import from Russia is possible only when 100% of power is supplied to the Crimea peninsular. Crimean consumers are in priority to the Ukrainian consumers of power.

Power supply to the Crimea Contract contains the following conditions:

1. Ukraine is obliged to provide uninterrupted power supply to the Crimea in the volume covering the complete actual consumption at the Crimea peninsular in spite of power shortage to supply power to home population. Therefore, rotational power cutoff can be done only at the base area of Ukraine but not in the Crimea.

2. In case of power supply restrictions to the Crimea the Ukraine part will have to pay a 20% penalty difference of actual and concurred volume of supply. So all failures associated with power supply to the occupied territory will result in additional economic damage to the Ukrainian part.

3. The power sale price (2.99 Rubble/kWh) was fixed for the entire 2015 and can’t change. This price is 15% lower than the price contract for power supply to the Crimea in 2014. This is a deep unprofitable price for the Ukrainian part.   

4. Analysis of actual and predictable volume of power import from Russia in January as well as supply to the temporary occupied territory of the Crimea shows that “UkrInterEnergo” losses could be about 200 million UAH in January that is 2.67 billion per year.

5. Ukrainian part can’t make changes or cancel a contract without concurrence with the Russian part. All disputes on these contracts Ukraine will have to solve at the Russian arbitration court (the fairest court).    

     • These contracts are the result of people incompetence who were assigned to the executive positions in the industry. (Mr. Demchishyn – Minister of Power – in the past he used to work at the investbank. Mr. Andriyenko - “UkrInterEnergo” Director – the former fire man. And others – without basic education…).