The Prime Minister of Ukraine has recently reported that the cost of utilities has reduced by 30%. Judging by the bills received for December, not for all Ukrainians and not in all cities. We have engaged readers’ proofs and turned to experts to clarify what happens to the tariffs and what their rate depends on.
The government’s declaration on tariffs reduction, the population adopted enthusiastically. The greater disappointment was of those who did not see any tariff reduction. Many people received bills where the amount of payments for heating is even higher than last winter, which was not as warm as this year.
Controversial proofs of the accrued amounts come even from those cities that are included in the official list of settlements where the heating tariffs had to be reviewed (Vinnytsia, Lutsk, Dnipro, Mariupol, Zhytomyr, Zaporizhia, Kropyvnytskyi, Sievierodonetsk, Lviv, Odessa, Rivne, Ternopil, Kharkiv, Kherson, Khmelnytskyi, Chernihiv, Ivano-Frankivsk, Kyiv).
It is difficult to understand the logic of differences in the bills. Local government bodies, that recalculate the tariff rate by the coefficient of the formula of the Cabinet of Ministers, also cannot always explain it.
In the beginning of January, Dmytro Miroshnychenko, a head of public utility company Mariupolteplomerezha, promised that the tariff for heating will be reduced by 15%. The savings will be at the average of 130 UAH in a one-bedroom apartment, 187 UAH in a 2-bedroom apartment, 264 UAH in a 3-bedroom apartment. In fact, Yuliia from Mariupol in January paid for heating of a one-bedroom apartment by 176 UAH less than before. But a resident of the same city Pavlo, told that he was accrued more for a one-bedroom apartment: “I called, asked, they told me that everything was recalculated, but, it turned out, my meter reading was very high”.
Pavlo Kyrylenko, a head of Donetsk Regional State Administration, announced the following indicators in the region: the heating tariff for December was to be reduced in Vyhledar by 16%, Bakhmut by 12%, Kramatorsk by 11.8%, Pokrovsk by 10% and Sloviansk by 9%. Meanwhile, gas price has increased since January 1; from January to April it will amount 5.500 UAH per 1.000 cubic meters without taking into account the extra charges for its delivery and distribution, with which depending on the region, gas can cost 7.2-7.8 thousand UAH per thousand cubes (which is cheaper than last year’s 8.5 thousand UAH, but obviously is more expensive than December 6.5 thousand UAH). According to Oleksii Orzhel, a head of the Ministry of Energy, who declared a reduction of the heating tariff “at an average of 27%”, the government hopes to reduce the gas price in the future.
One thing is clear – there will be no fixed tariffs during 2020. Public utility employees-optimists say that heating tariff may be recalculated in January. Public utility employees-pessimists suppose that reducing the figure in a bill was a one-time action. In addition, only the cost of a gigacalorie was recalculated, so a temperature factor will be added for consumers who do not have meters. Because January is much colder than December, charges can grow by 5-10% only because of this factor.
The order of payment for gas has changed in January. Instead of one bill, consumers will now receive two: separately for the consumed gas, and separately for its distribution. You will have to pay the gas distribution net operator for the delivery of gas to your house. This is not extra money – they simply will withdraw the amount of consumed gas for transportation from the bill.
It is not necessarily that all gas distribution companies will have time to organize their work in time. It is possible that some consumers will receive two month’s bills in February. Net operators, who make bills for distribution, advise you to pay for several months in advance. That way you can save some money without paying a commission each time. You do not have to delay the payment; otherwise, there will be a penalty interest.
It is necessary to pay for gas in another bill within 5 days since you got a billing invoice.
For 44 regional gas distribution companies, the distribution tariff amounts from 0.28 to 1.99 UAH per cubic meter of gas per month since January. The smaller the city is, the higher price is in the bill. In the metropolitan cities, the nets are rather short but there are many consumers. Where the tariff is higher, nets are longer but there are less consumers, so more money is needed to maintain them. For this reason, residents of villages as well as small towns will pay the most expensive.
The lowest distribution tariff is 0.28 UAH was set for JSC Kyivgas, the highest is 2.73 UAH for LLC Spectrgas (Lviv). In our region for consumers of PJSC Donetskoblgaz, the tariff will amount to 0.84 UAH, PJSC Mariupolgaz is 1.14 UAH.
From July, the tariff will increase and amount from 0.28 to 2.73 UAH depending on the region.
Gas distribution payment is calculated individually. To do this, they calculate the amount of gas consumed by the household during the previous gas year (currently from October 1, 2018 to September 30, 2019), multiply it by the distribution tariff (regardless of whether you have a whole-building meter or it is in the apartment), and this annual payment is divided into 12 monthly payments.
Theoretically, rising cost for transportation tariff should be small, because this component is still in the bill, it is not separately written. But it is unclear how it will be in practice. We should keep in mind that every additional bill is extra money for the bill itself, so gas can go up in price from a few dozen kopecks to the hryvnia per cubic meter. As of January 29, bills for residents of Donetsk region for gas distribution vary greatly – from 5-6 UAH to 300 UAH (information from Sloviansk). «At my one-bedroom apartment of 29.9 sqm, I received a payment of about 27 UAH, and my daughters has a three-bedroom apartment of 60 sqm, she received a payment of 6.65 UAH. What does it mean? ”. – Iryna from Mariupol writes. It was not possible to find out the reason of such a difference; to call Mariupolgaz is impossible. However, the bills require paying until the 20th of the month in which the service is provided, while the first bills for gas transportation came on January 21-23.
Electricity tariffs have not yet changed. But the increase is in the plans of DTEK, which proposes to increase the tariff for the first 100 kWh/month to 1.68 UAH from 90 kopecks per kW. For those who consume more than 500 kWh/month, it is proposed to raise the tariff by 1.2 UAH per kWh to 2.88 UAH per kWh. In the future, the tariff for the population consuming up to 500 kWh/month is planned to be increased by 25% annually.
So far, such tariff increases have not been approved, they remained at the level of 90 kopecks per kWh if up to 100 kW per month were used. Over 100 kW is 1.68 UAH.
8 TIPS FOR ECONOMICAL HOSTS
Residents of European countries are constantly looking for ways to reduce utility bills. We can take the habit of saving too.
- Reduction of electricity consumption by eight times is achieved by the complete replacement of all Soviet incandescent lamps with modern LEDs. Retirees do not usually buy them because they seem expensive, so they have to replace the Soviet lamps every 3-4 months.
- Even the color of the wall can save electricity: the white wall reflects 80% of the directed to it light, dark green – 15%, burgundy – only 10%.
- If you turn off the water while brushing your teeth, you can save about 8.000 liters per year. Using a glass for mouth washing, you can reduce costs even more, as you will turn on the water only once.
- About 8-15% of the total water consumption per home is typically used in the kitchen. When washing dishes, it is more efficient to either use the sink as a bowl, filling it with water, or rinse all the dishes, then soap it, and then rinse the detergent.
- A dripping faucet leads to the consumption of 7.000 liters of water per year (if it drips slowly), but if the water runs thin, its losses will be 30.000 liters per year. This should be quickly improved and resources consumption should be stopped. Until the problem is solved, it is better to collect and reuse the leaking water, for example by watering plants.
- Load the washing machine for at least three quarters. When replacing, pay attention to modern Eco devices – they are designed to reduce water consumption. Compared to older models, water savings can be 50%.
- Energy losses because of cold walls amount to 40-70% of total heat need. Therefore, high-quality wall insulation is the key to saving energy and maintaining a normal microclimate in the premises. This is especially true for private houses that are not dependent on municipal heat boiler stations.
- By closing the curtains overnight, heat losses can be reduced because of the windows.
ENERGY MARKET: HOW DOES IT WORK?
Bringing Ukrainian tariffs to a market level is a requirement of the European institutions in exchange for investments. But they also require that consumers who are in a difficult situation and are unable to pay their bills, will be protected by the state. Roman Nitsovych, an energy market expert and research director of DiXi Group consulting company, told about this HROMADA Skhid.
– Europe does not dictate to us in what way we can reduce the burden on people. These should be direct subsidies or regulated price for any amount of energy when the first 100 kW or the first 100 cubic meters are at a preferential price. There are many ways, and each country has to decide how to protect the consumer, – Nitsovych said.
How did the Ukrainian energy market work until 2014? As the state gas output is not enough to meet all the needs of the population in gas and heat, Naftogaz bought imported gas and sold it at the regulated price. There was a chronic deficit of Naftogaz, which consumed billions of budgetary subsidies, and the issue of domestic government bonds covered the debts. Namely, this “black hole” was closed by tariff increases with low-income compensation at the same time.
– It used to be that the rich people could consume a lot of gas to heat the villa, because gas was cheap for everyone. Therefore, higher prices plus compensation for the poor people are better than low prices for the poor and the rich alike, – Oleksandr Zholud, a member of the editorial board of the analytical publication VoxUkraine said.
In addition, low prices for the population were offset by high prices for enterprises. Of course, we paid the amount anyway, because manufacturers put their costs into the value of goods and services.
Since Ukraine started moving towards building a market model, Naftogaz has turned from a subsidy monster into a profitable company in 2015, the largest source of revenue to the state budget. Instead of intermediary firms with taxpayers’ money in their pockets, more than 500 gas traders appeared in the Ukrainian market and a stock exchange started to work that allows to buy energy resources at a reasonable price. The state, buying and selling on the market a certain part of the accumulated energy in itself, and generates in fact that subsidy, which then it compensates to the retail suppliers.
Currently, we have both reformed sites (Naftogaz) in Ukraine and underdeveloped ones, among which there is a “weak link” – the lack of choice of a service provider. The European model provides for purely market, unregulated prices, but there is always a choice for a consumer. The point is that suppliers compete for their customers in price, quality and service. For your money, you are free to choose the best bet.
So far, these competitions are taking place in those market segments that are open. These are industrial consumers, budgetary institutions that buy gas and electricity through the Prozorro procurement platform. For the population, prices are still regulated. They are growing, despite populists’ statements and attempts to stop tariff increases in «manual mode».
– Sometimes our politicians turn to non-market methods: let us write debt off, let us reduce prices, Roman Nitsovych explains. – Similar decisions may take place, but if we go that way, we will have unpredictable consequences. Because someone still has to pay for it.
– Either the state-owned company will pay shortcoming in revenue, or we will not invest in our own production, in the operation of our networks and they will crush. Thus and so we will have technogenic catastrophes, massive power outages and disruptions in the supply of services will begin, – Oleksandr Zholud enumerates the intended consequences.
According to experts, it is necessary to get used to the fact that resources are not cheap and cannot be cheap. If we make them cheap artificially, then the depreciable value will not be in favor too.
Yuliia HARKUSHA, Oleksii HNATENKO/Gromada