Oleksandr Fomenko, Director of Kyivenergo: "Tariffs for all district heating utilities are unprofitable"
IN AN INTERVIEW WITH BUSINESSCENSOR, FOMENKO DISCUSSED THE DIFFICULTIES OF TRANSFERRING UTILITY PROPERTY TO THE BALANCE SHEET OF KYIVTEPLOENERGO, HOW UNPROFITABLE THE HEAT SUPPLY IS, AND WHY KYIVENERGO DOES NOT PROVIDE NORMAL SERVICE.
IN AN INTERVIEW WITH BUSINESSCENSOR, FOMENKO DISCUSSED THE DIFFICULTIES OF TRANSFERRING UTILITY PROPERTY TO THE BALANCE SHEET OF KYIVTEPLOENERGO, HOW UNPROFITABLE THE HEAT SUPPLY IS, AND WHY KYIVENERGO DOES NOT PROVIDE NORMAL SERVICE.
Kyiv is on the threshold of great changes with respect to its power supply. In June 2017, the Kyiv City Council resolved to terminate the lease of utility facilities by Kyivenergo.
The lease agreement, which was signed back in 2001, expired at the end of 2017. The City Council extended it until April 26 of this year in order to avoid problems during the heating season.
In 2012, Rinat Akhmetov’s energy holding DTEK bought shares of Kyivenergo in a privatization tender. Currently, Akhmetov’s three companies, DTEK Grids B.V. (Netherlands), Ornex Limited (Cyprus) and DTEK Energo own more than 93% of Kyivenergo.
After the decision of the Kyiv City Council to withdraw utility property from the control of Akhmetov, DTEK decided to separate the operator of the city's electric grids from Kyivenergo in November 2017.
DTEK Kyiv Grids was established for this purpose; the company began to function on March 1. While the separation of the operator of grids took place without much trouble, the transfer of utility property from the balance sheet of Kyivenergo to the balance sheet of the public utility Kyivteploenergo is a rather difficult process.
For example, Kyivenergo's 7,500 employees want guarantees from the authorities of the capital that all of them will keep their jobs without losses in wages or social benefits.
In addition, in an interview with Ukrainian News, Petro Panteleyev, the deputy chairman of the Kyiv City State Administration (KCSA), said that the public utility company is caught up in a legal conflict.
In order to control generating capacities, Kyivteploenergo needs to obtain a license and a tariff from the National Energy and Utilities Regulatory Commission (NEURC). However, Kyivteploenergo needs to have generation facilities on its balance sheet to obtain the license and the tariff. Further complicating matters, its work cannot be interrupted, so having one without the other is not an option.
This problem was confirmed to BC by the NEURC. According to Dmitriy Vovka, the head of the Commission, Kyivteploenergo has delayed its submission of documents. The procedure of obtaining the license and getting the tariff approved takes up to three months. This won't happen before the end of April.
A solution could be another decision by the Kyiv City Council to prolong the lease agreement or the intervention of the Verkhovna Rada, which could transfer Kyivenergo's licenses and tariffs to the public utility company through a separate law.
DTEK, for its part, wants to receive compensation for the funds it invested in the capital's utility facilities from 2012 to 2017. Akhmetov's holding company insists that the best solution for the city would be to buy out Kyivenergo's shares.
BusinessCensor spoke with Oleksandr Fomenko, who has managed Kyivenergo since Akhmetov acquired the company's shares. Before that, Fomenko had been in charge of another DTEK asset, Dniprooblenergo.
In the interview, Fomenko talks about the the division of Kyivenergo property, the economics of the city's heat supply and Kyivenergo's customer service, which the overwhelming majority of Kyivans complain about.
DIVISION AND THE END OF THE LEASE OF UTILITY ASSETS
- Tell us how the division of Kyivenergo is going. Which companies will there be as a result?
- The division has already happened. In accordance with the Law on the Electricity Market adopted a year ago, a dedicated company, DTEK Kyiv Electric Grid (DTEK KES), started operating. This company became the legal successor of all obligations concerning distribution activities.
This didn't affect customers in any way, except in that payment details were changed. The renegotiation of contracts for power supply is not required.
Obviously, new customers will sign contracts with DTEK KES. However, in January, we launched a service for signing power supply contracts remotely, online.
The situation is similar with heat: since January, consumers have been able to conclude contracts online. (It is not advisable to conclude heat supply contracts until the separation of Kyivenergo is complete, as there is no guarantee that it won't be necessary to renew the contracts with the new company - BC).
- What is DTEK KES? Is it a table, a chair and a bank account?
- Nothing of the sort. It is a full-fledged production company, no different from your typical regional power company. It owns the city's electricity grids and acts as a supplier.
- According to the law, it is also necessary to separate the transmission from the sale of power.
- That's correct. In the first phase, we separated off the distribution company from the generation one. In the second, in December 2018, we'll launch the general service supplier.
- Will Kyivans have to renew their power supply contracts after the retail companies start operating?
- I don't think so. The same principle at work in the division of Kyivenergo and DTEK KES will be applied here: the contracts will be transferred to the new company "by right of succession."
- From what moment will competition in the supply of power be possible?
- I would split this issue into two components. Customers include individuals and legal entities. Legal entities can already choose a supplier. In Ukraine, companies that supply power at unregulated tariffs have been operating for a long time (SUTs - BC).
The population is quite another matter. The National Energy and Utilities Regulatory Commission (NEURC) sets a fixed tariff for individuals cascaded in terms of consumption.
As soon as the state refuses to set a fixed price for power for the population, independent suppliers will start to enter this market.
- Today, the low power tariff for the population is subsidized at the expense of a higher tariff for legal entities. How much might the tariff for individuals increase when the market starts working?
- Price formation in the power market is quite complicated. The simplified version: all costs related to the production and supply of power are added up, then divided by its volume. That's essentially how the average price is formed, which can be considered the market price.
At this point it's probably difficult to say how the transition to a 100% market for all consumer groups will affect the price. Theoretically, prices will increase a little for the population, and they'll decrease a little for industry.
- What assets will be transferred to the public utility company Kyivteploenergo (KTE) after the termination of the lease contract for Kyivenergo assets on April 27?
- Kyivenergo was privatized in 2012. DTEK purchased the state's stake in the company and took up management functions. We inherited the contract with the city on the management of utility assets.
- What are the utility assets?
- Two combined heat power plants, CHPP-5 and CHPP-6, the Energia waste incineration plant, about 180 boiler houses and heating grids with boilers, accounting units and all retail infrastructure.
That is to say that all heating grids are utility property, and electric grids are, for the most part, joint-stock property. The list does not include, as a rule, former ownerless grids, which, under a decision of the Kyiv City Council, were transferred to the city's balance sheet and to the control of Kyivenergo.
Now we've separated out the joint-stock electric grids from Kyivenergo and transferred them to DTEK KES.
- The lease contract for utility assets ends on April 26. Will all utility assets be automatically transferred to Kievteploenergo the following day?
- Yes. There hasn't been another decision of the Kyiv City Council at this point. As of April 27, we are obliged to transfer all assets to Kyivteloenergo.
- That is, to transfer all the property of Kyivenergo, including administrative buildings and equipment, except the electric grids, which have already been separated off into DTEK KES?
- That's correct. Kyivteploenergo will provide a full range of services in terms of heat supply and hot water supply. For instance, the generation of heat and power at CHPP-5, CHPP-6 and the Energy plant will be transferred to the public utility company.
I should stress that this property will be transferred under a decision of the Kyiv City Council.
- Why do you stress that? Does DTEK disagree with this decision?
- It's not about that. We have managed this complex for six years, we know its problems, its economics, the development prospects.
I'm drawing attention to the fact that today, there is only one official decision. There is no alternative. Although my subjective opinion is that it makes no sense to break the current management system and develop a new one.
Perhaps it would be better to resolve the situation at the level of corporate law; for example, through buying back Kyivenergo's shares.
- At what price is DTEK ready to sell Kyivenergo shares, should the city decide to buy them from DTEK?
- We are currently estimating the value of Kyivenergo shares. There's no figure at this point.
- Will DTEK go to court to collect compensation for the shares of Kyivenergo that it bought from the city?
- No. DTEK bought Kyivenergo with the understanding that its property would include only electric grids. Everything else was under management, according to the lease contract.
I'll say it again: the lease contract came to us as an inheritance. It was concluded in 2001 and changed in 2007.
There are no objections regarding the expiry of the term of the lease. There is a question related to the compensation of funds that have been invested in utility assets from 2012 to the present day.
We took out loans and sought financial assistance.
- What kind of compensation do you want? How much money was invested?
- Only the loan of $30 million that we took out in 2012.
- Will you personally stay at DTEK? Will you head DTEK KES?
- It's difficult for me to say where I'll be working after the division of Kyivenergo. (By the time the interview was published, Oleksandr Fomenko had been appointed the general director of DTEK KES, and he continues to perform the duties of the general director of Kyivenergo – BC).
- Will Kyivenergo be eliminated after the division?
- If it really stops producing, supplying and selling thermal energy, then yes.
- Why are you saying "if"? Are there other options?
- The end of April is not far off. We need to do a lot of work: get the licenses and tariffs from the NEURC, accept personnel, accept the fixed assets, check and accept the accounts receivable and payable.
There's a lot of work, because we're not following the path of succession, but are transferring assets from one legal entity to a completely different company.
There are questions about contracts for the supply of heat and hot water. Should they be renewed after the transfer of assets to the new company?
In addition, there is the problem of contracts with suppliers. For example, DTEK KES will now supply power to Kyivteploenergo. It is necessary to enter into gas supply contracts with Naftogaz of Ukraine and into contracts with the transit companies Kyivgaz and Ukrtransgaz.
It is necessary to renew land lease contracts, contracts with Energorynok on the sale of power, and general economic contracts.
There is concern that the public utility company will not be able to meet the deadlines that have been set.
- That's why the city postponed the end of the lease term from the end of the calendar year to the end of the heating season.
- Yes. That's right. However, there has no decision of the Kyiv City Council on the suspension of hot water supply in the summer season. Generation should not stop.
For example, there's simply no way to halt the operation of CHPP-5
. This is due to the technological characteristics of the Kyiv energy ring. If CHPP-5 is shut down, the capital will be left without electricity.
There are two limiting factors - the generation of electricity and the supply of hot water. The Kyiv energy complex is one of the largest in Europe. It's 5,000 kilometers of grids, thousands of boilers, and the two largest combined heat power plants in the country.
- Under what conditions will the personnel of Kyivenergo go over to Kyivteploenergo?
- We have drawn up a list of names of employees and passed it on to the city. There are 7,500 employees. Also, in the near future, we will pass on information about the manning levels of Kyivenergo, specifying salaries and social packages.
The first four-way meeting involving representatives of the city, the leadership of Kyivenergo, Kyivteploenergo, and Kyivenergo's trade union took place on March 29.
As far as I understood from the discussion, Kyivteploenergo is ready to accept all of Kyivenergo's employees.
- What can you say about the professional qualities of Yulia Orel, the director of Kyivteploenergo?
- Nothing. We've never worked together.
- Do you think the tariff for heat generation today is justified?
- The tariff is an expense portion divided by the volume of the good. The method for setting tariffs uses forecast rates of production, transmission, and consumption.
For example, the tariff for Kyivenergo includes heat consumption at the level of 10 million Gcal per year, but the actual amount is 8.8 million Gcal. There are several reasons: consumers save as much as possible, and we try to produce as much as necessary.
That is, the tariff includes a larger rate of production than there is in reality. In addition, built into the tariff are production heat losses, which do not take into account accidents, leaks, lack of insulation, and so on.
This leads to a situation where the actual losses are higher than the normative ones included in the tariff.
The fact that the gas price in the tariff for certain categories of consumers does not correspond to the actual procurement price of gas is critical for thermal companies. Here lies the reason for the colossal losses of thermal facilities throughout the country.
There are also times when the price of power changes several times over the course of the year. But the tariff includes the planned price for power at the time when we're protecting the tariff. The price of water depends directly on the price of power. The tariffs for water supply are increasing, while those for heat are staying the same.
I have no right to say that today, the tariffs are not justified de jure. There is a methodology, though it's not perfect. But in fact, the tariffs for all heating utility enterprises of the country, without exception, are unprofitable.
All heating utility enterprises receive subsidies, either at the expense of local councils, or at the expense of the shareholder, as is the case with Kyivenergo. Last year, we took UAH1.4 billion from DTEK to cover our operating costs.
- DTEK is glad to get rid of an unprofitable asset, the Kyivenergo thermal block, isn't it? Why didn't you try to get rid of it before?
- I have been with the company since 2012. We had a plan of measures to bring the Kyivenergo thermal block out of the crisis it was in, first of all, then to make changes to the regulatory framework so that the country's heating utility enterprises could work as full-fledged production companies.
A company should be balanced and not accumulate losses. It should not require systematic topping-up to carry out its production activities. Otherwise, it will be a hole in the system.
Since 2012, we have been constantly taking initiatives to change legislation, the regulatory framework, and the tariff system. You can't say that Kyivenergo and DTEK have done nothing to change this situation.
THE COMMERCIAL ACTIVITY OF KYIVENERGO
- Do you buy gas only from Naftogaz of Ukraine?
- Exclusively from them. In accordance with Resolution No. 187 of the Cabinet of Ministers, we buy gas from Naftogaz for all categories of consumers. (The Cabinet of Ministers extended Resolution No. 187 to June 1, 2018 by Resolution No. 228 on March 28 - BC).
We have contracts for shipping with Kyivgaz and Ukrtransgaz.
- Both Naftogaz and Kyivgaz intermittently raise the issue of debt on the part of Kyivenergo.
- All heating utility enterprises operate in a special accounts mode. In accordance with the Decree of the NEURC, payments that come in from customers are divided. One part goes to Naftogaz as a gas supplier, another to transit companies. The heating utility enterprises receive their portion for carrying out economic activity under the residual model.
Of course, Naftogaz, having sold gas to us in February, records that we have debt obligations to it on March 1.
Eighty percent of the Kyivenergo heat supply is the population. We issue invoices to the population only after the 10th of the following month. Accordingly, invoices for February are issued after March 10. Payments by the population for the consumed resource are made by the end of the month at the earliest.
In addition, there are seasonal upsurges. In the heating season, invoices for utilities are big, and payment doesn't reach 100%. Therefore, we have minimum debts to Naftogaz at the beginning of the heating season, and maximum debt to it and to transit companies at the end, just like our customers.
- How much do you owe Naftogaz now?
- As of March 1, it was about UAH 4.5 billion.
Is this seasonal debt, or does it include old debts?
- The majority of this amount is seasonal debt. To give you a sense, 4.5 billion represents two-month gas consumption for Kyivenergo.
- What losses did Kyivenergo receive in the area of generation, supply, and sale of thermal energy in 2017?
- Total consolidated losses in 2017 amounted to UAH 140 million, and losses from the thermal segment amounted to more than UAH 800 million.
- Do I understand correctly that the generation, supply, and sale of power are profitable? And that they cover losses in the thermal segment?
- It's difficult to separate them out, since CHPP-5 and CHPP-6 are cogeneration. They produce both power and thermal energy. For example, profit from generation over the past year was about UAH 33 million. That's the work of just two CHPPs.
Overall, we had big losses in the thermal block, generation almost broke even, and distribution was profitable in 2017.
- So DTEK took the most profitable part of the business and left all the unprofitable activity to the city.
- I didn't say the holding has any worries about the end of the lease contract. In addition, DTEK is a professional operator in the power market. It engages in generation and distribution.
Kyivenergo is an exception in DTEK's structure. The company worked as a holding company within the holding.
- In 2016, Kyivenergo got going with a small profit of UAH 2 million, and in 2017 you posted losses of UAH 140 million. Why did that happen? There were no global changes during this time.
- In 2017, the situation for heating utility enterprises got worse for one simple reason. As of April 2017, in accordance with Resolution No. 187 of the Cabinet of Ministers, the company was obliged to buy gas from Naftogaz at a fixed price. For the population: UAH 4,942 per thousand cubic meters, VAT exclusive. For industrial and state-financed organizations: with a coefficient of 1.6.
So for a long time, the gas price for the industry and the public sector was not included in the tariff for heat supply services. That is, until March 2018, we bought gas at a higher price than the one that's built into the tariff.
That played a key role in the growth of losses.
- Can you disclose the structure of the debts? How much does the company owe suppliers? And how much do consumers owe the company?
- As of March 1, our debt to Naftogaz is UAH 4.5 billion, and we owe about UAH 0.7 billion to transit companies.
The population's debt to the company is about UAH 5.9 billion. The debt for incentives and subsidies from the state budget to the company is about UAH 1.1 billion. Part of this was repaid in March, but we're still in debt.
Also, there are state obligations to compensate for the difference in tariffs that were valid until 2016 – UAH 729 million. This amount has not yet been paid.
In general, the debt we're owed is much greater than our debt to the main suppliers.
- Will Kyivenergo be ready if Resolution No.187 of the Cabinet of Ministers, which involves the sale of gas to heating utility enterprises at a fixed reduced price, is canceled at the request of the International Monetary Fund?
- If this happens, the heating utility enterprises will need powerful financial support. The increase in the gas price up to the market level will be included either in the tariff for consumers or in local budgets, which will be forced to subsidize the work of the the heating utility enterprises.
CUSTOMER SERVICE
What about the Customer Service Centers (CSCs) after the division? DTEK KES and Kyivteploenergo will have their own CSCs, right?
- Here we need to go into history a little. When we developed a program for providing services in 2013, the market worked differently. Heating utility enterprises, unlike regional power companies, didn't act as service providers for a specific customer.
Kyivenergo supplied thermal energy up to the wall of the house and sold it to a housing and utility management unit (known as a ZhEK). Therefore, the CSCs and the call center were created for the tasks that we were facing. This is almost 1.2 million power consumers.
In April 2014, legislative amendments were adopted, according to which Kyivenergo became a service provider for heat supply. We had to add nearly 900,000 new heating and hot water consumers to our customer base.
We tried to organize customer service at the facilities that we had. Unfortunately, the NEURC did not provide us additional funds in the tariff to increase the capacity of the CSC and the call center.
- I personally went through the hell of signing a contract at an CSC. Worst service I've ever seen. Most Kyivans will confirm that. So tell us who's responsible. Who is to blame for the fact that Kyivenergo' SCSs can't cope with the flow of customers? Is it the NEURC, which didn't approve the required tariff?
- It's not entirely correct to pass the buck today. The company believed it was possible to serve all itscustomers with the existing CSCs. After all, in effect, we have the same customer for both electricity and heat.
We didn't expect there would be such a great load from heat and hot water. There are a number of reasons for this. There was an unexpected amount of activity among the population; everyone wanted to sign contracts at the same time.
There was a problem in connection wit the large base of hot water meters. This added to the load.
But one of the main problems was the incorrect information about heated areas in the housing stock. The Main Information and Computing Center (MICC) gave us data on the area.
We worked with their database for a year and a half until we implemented our own billing system in 2016. The MICC base was incorrect, to put it mildly, when it came to areas, sums of charges, and readings of meters.
That's why tons of customers came not just to sign contract, but also for reconciliation, with complaints about incorrect charges. We still have a commission that identifies unauthorized replanning, hook-ups, and additions to homes.
Who is responsible for accounting for housing resources now?
- The State Architectural and Construction Inspectorate (SACI). It's in the middle of a drawn-out reform. Its regional branches have been eliminated, and nothing new has been created to replace them.
We don't understand which agecy should be working on illegal additions and replanning today.
- To supply hot water in the summer is unprofitable for Kyivenergo, as the cost of each unit of heat increases sharply in connection with low production rates. Can you can give a signal to Kyivans: either expect hot water in the summer, or everyone invest in boilers?
- Difficult question. This is solved in different ways within the country, depending on the decisions of local councils. There are cities that have said openly that supplying hot water in summer is a loss-making activity.
You don't have to look far. Last year, Brovary (part of the Kyiv metropolitan area - BC), refused hot water in the summer.
Kyiv is different from the rest of the country. It's a large metropolis characterized technologically by three major combined heat and power plants (CHPP-5 and CHPP-6 Kyivenergo on gas, Darnitskaya CHPP of Euro-Reconstruction Company on coal – BC), which also operate in the summer.
If cogeneration produces only electricity, it will be extremely expensive. It's not economically feasible. All the more so seeing as gas generation is already noncompetitive.
Thus, in Kyiv, switching to boilers is possible in the summer period. There is no reason to shut off cold water in the areas covered by CHPP in the summer. If an area is covered by district or building boiler rooms, and the entire building switches to boilers, this will be feasible.
Then hot water will be cheaper for customers, and heat suppliers will not be operating at a loss. At any rate, this has to be decided by the authorities, and not by supplier companies.
- If the entire city switches to boilers, will the electric grids be able to handle the increased electricity consumption?
- There's a problem for old buildings from the 1950s and 1960s, what are called "Khrushchyovkas." Four years ago, we launched a program to increase the cross-section and capacity of cable lines to homes.
Unfortunately, there is no joint program with housing organizations for the modernization of wiring in residential buildings. After all, they have to simultaneously upgrade their switchboard and house grids.
However, our lines are being improved, as it is clear to us that electricity consumption is increasing.
At any rate, a repair campaign is being implemented in the summer period. Thus, there will be no hot water for a certain time anyway. Clearly, it is better to have a boiler than not to have one.
In terms of comfort, as the head of Kyivenergo, I recommend that customers install boilers to get hot water, at least while repairs are underway.
- Why does Kyivenergo calculate payment based on a standard, if meter data on hot water consumption is not sent?
- Due to changes in legislation, as of August 2017, all consumers must submit readings of apartment heating and hot water supply meters monthly.
Otherwise, according to the law On Commercial Accounting of Thermal Energy and Water Supply, energy companies are to calculate the cost of the service based on the average consumption of the service in previous terms.
If a consumer fails to submit hot water meter readings for a long time (more than a year), calculations will be based on standard consumption.
The amount will be adjusted when the customer notifies the energy company of the actual meter readings.
- In general, my opinion as a consumer tends to be that the entire service system of Kyivenergo is meant to receive as much money from customers as possible, regardless of whether services were provided or not.
- We should divide services into two categories. There are almost no issues as regards electricity. You yourself acknowledge this. It turned out this way because there's a proper regulatory framework, a proper billing system, a proper account on the website - there are possibilities for service.
But then there are thermal energy and hot water It's clear that these can't be compared with electricity sales in terms of service. However, we can't forget that here, too, a lot has been done over the last year and a half.
Accounts became available on the website, and in April it became possible to submit meter readings for electricity, heating, and hot water via Viber.
We have no interest in cheating clients to get extra money for non-existent services, as you put it. There is a simple reason for this: if I'm systematically getting cheated, I just stop paying.
- But I have no choice. At present, it's not possible for me to switch to another supplier. And if you just stop paying, Kyivenergo will stop providing services.
- At any rate, I would not look at separate issues as a system. There are probably some instances of incorrect calculations, additional charges, etc. But all this is being fixed case by case.
As regards competition, let's be clear. There's an alternative when it comes to hot water: a boiler. As for electricity, the market should get going in the near future.
- That's not really an appealing alternative, as you either have to pay Kyivenergo for hot water or for electricity… Can you affirm that the situation at CSCs is now stable, and the number of customers does not exceed capacity?
- There are seasonal periods. It's clear that the maximum load for CSCs is in winter, when there are both heating and electricity. In summer the number of applications falls.
Also, there are waves within the month. The main load occurs when bills are issued. People visit for reconciliation or ask for clarification of their bills. Thus, in the second half of every month, the load is at the maximum level. At the beginning of the month, sometimes it's even possible to give our specialists days off.
In total, there are 13 CSCs. Excessive load is an issue. However, these problems come and go.
To increase the capacity, on April 1, an agreement was signed with Integrated Service Centers (ISC) under district administrations, which serve customers dealing with other utility-related issues. In total, there are 10 of them.
Since April, Kyivenergo clients have been able to go to these centers with questions pertaining to heat and hot water supply. So our 13 CSCs will be supplemented with 10 ISCs under district administrations.
- How many of the 13 CSCs went to DTEK KES after the division?
- Eight CSCs are required for us to distribute electricity – one in each district. It is planned to give DTEK KES five of the current 13 –those that were joint-stock property.
- At Nova Poshta, for instance, managers sometimes go to work at their branches to better understand their customers' needs and how to improve the service. Have you ever been to a Kyivenergo CSC?
- Yes. Kyivenergo has a similar program. Anonymous visits are arranged. I have visited CSCs incognitо many times. They are visited not only by Kyivenergo's management, but also by DTEK's.
- And what are your impressions?
- The goal of our visits: to ensure the maximum correction of the inadequacies that can be seen immediately from the outside. Then, an analysis is carried out, and certain changes are introduced.
It's now possible to make appointments online, and one CSC has fully switched to this scheme of operation. The main point is that an effort is being made to implement as many IT solutions for communications with customers as possible.
It's also in our interest to service customers remotely as much as possible, for them to switch to automatic online service.
- What are the main concerns customers communicate to CSCs?
- The main reasons they come to us: reconciliation. That's 60% of customers. Then there are signing of agreements and submission of meter readings.
- At CSCs, both legal (business) and physical persons (the population) are served in the same flow. Is this normal?
- Major consumers are served by a separate CSC. Smaller companies usually select a CSC based on its location. We often propose that a customer go to a particular CSC. However, as a rule, companies refuse.
Recently, the service system for legal entities changed dramatically. Out of 33,000 legal entities served, approximately 18,000 are served remotely, by means of electronic document flow with the use of electronic signatures.
- How many electricity consumers pay for services using their accounts on the website?
- We have 1,166,000 electricity customers. Almost 600,000 have created accounts. There are approximately 400,000 active users, those who visit their accounts monthly.
This number increases every year. Our expectation is that ideally, approximately 70% of the clients will switch to online service.
Coverage in thermal energy is slightly lower. Accounts were introduced later. Approximately 300,000 of our 900,000 thermal energy customers have created accounts.
- Does the UkrBilling system have a connection to Kyivenergo or Rinat Akhmetov SCM?
- No. We pay a developer to continuously improve and support it. I don't know any regional electricity company that would have its own personal billing system. As a rule, this service is outsourced.
UkrBilling provides services for half of the country's regional energy companies.
- What is the percentage of consumers in Kyiv who have installed thermal meters?
- As of March 1, approximately 74,216 heat meters were registered. At the end of 2015, there were about 38,400. This is approximately 8% of the total number of heat consumers in Kyiv.