Ukraine's National Energy, Utilities Regulatory Commission plans to raise Ukrtransgaz tariffs, encourage capacity booking
MOSCOW. May 5 (Interfax) - Ukraine's National Energy and Utilities Regulatory Commission (NEURC) plans to raise the natural gas storage, injection and withdrawal tariffs of Ukrtransgaz, the operator of Ukrainian gas storage facilities, from June 1, 2026, for the first time since 2022, replacing the current "cost plus" model with an incentive-based tariff setting plan.
The correspondent draft order has been included in the agenda of NEURC's May 5 meeting, at which the commission is expected to approve the move and review proposals, Ukrainian media reported.
The draft document published on the NEURC website orders that "the following tariffs be set for Ukrtransgaz services for the regulatory period from June 1, 2026 through March 31, 2029: natural gas storage tariffs at UAH 0.45 per 1,000 cubic meters per day (excluding VAT), natural gas injection tariffs at UAH 360.02 per 1,000 cubic meters per day (excluding VAT), and natural gas withdrawal tariffs at UAH 360.02 per 1,000 cubic meters per day (excluding VAT)," Ukrainian media reported.
Calculations published on the Energy Reform website indicate that Ukrtransgaz' tariff for natural gas storage is expected to grow by 12.5% from today's UAH 0.40 per 1,000 cubic meters, the tariff for natural gas injection by 47.8% from the current UAH 243.52 per 1,000 cubic meters, and the tariff for natural gas withdrawal by 42.3% from today's UAH 253.03 per 1,000 cubic meters.
Ukrtransgaz tariffs are currently regulated by the "cost plus" model, but the law on natural monopolies allows for the introduction of incentive-based regulation in tariff setting for these services. For this purpose, Ukrtransgaz has submitted an application and the required package of documents.
In order to constrain Ukrtransgaz tariff growth, a proposal has been put forth to use the earnings rate of 3% both or the regulatory asset base existing as of the date of the transition of incentive-based regulation and for the asset base created after this transition is completed, NEURC said.
Tariff calculations are based on the planned annual gas injection capacity of 8.08 billion cubic meters (bcm), the planned annual gas withdrawal capacity of 8.4 bcm, and the planned average annual gas storage volume of nearly 11.3 bcm.
NEURC also plans to encourage long-term booking of gas storage facilities' capacity, which currently takes place predominantly one day in advance and on a monthly basis, which hinders mid-term planning of underground gas storage facilities' operations and contributes to excessive wear and tear of equipment, resulting in higher equipment maintenance costs.
Therefore, NEURC proposes applying a coefficient of 0.9 to booking for a year and a coefficient of 1 to capacity booking for one standard season of gas injection and withdrawal. The coefficients applied to monthly booking and to booking for one day in advance will remain unchanged at 1.1 and 1.2, respectively.
Gas storage tariffs at Ukraine's underground gas storage facilities have not been revised since July 2022 and do not currently cover their maintenance and repair costs, Ukrainian experts said.
