Assessment of NEURC’s approach to regulatory assets based and incentive based regulation of distribution network tariffs in Ukraine

A compliance note published The Energy Community Secretariat, which assesses the approach of the National Energy and Utilities Regulatory Commission (NEURC) of Ukraine to distribution tariff setting rules for electricity. Ukraine is in the process of transitioning towards an incentive based methodology for distribution tariffs, the implementation of which is important for setting the right incentives for operators to modernise and develop electricity distribution networks while maintaining fair prices for consumers.

In the compliance note, the Secretariat examines whether the distribution tariff methodology and accompanying tariff setting rules adopted by NEURC in August 2020 comply with the key principles of sound tariff regulation of network operators and how they contribute to creating a fair, predictable and stable regulatory framework. The Secretariat makes recommendations on how to improve the switching to the new methodology.