DTEK has completed unbundling of its electricity distribution and supply businesses

DTEK has completed unbundling of its electricity distribution and supply businesses

Publications about reform11 February 2019

As part of the electricity market reform, DTEK has completed unbundling of its electricity distribution and supply functions, within the time and in line with the requirements set by the Law of Ukraine on the Electricity Market. The legal successors of the former oblenergo companies are the Distribution System Operators (DSO) as well as legal entities established for the sole purpose of supplying power. Strategic management of each business and ensuring independence in managerial decision-making will be the responsibility of the operating companies set up within the DTEK Group.

As a result of unbundling, KYIVENERGO PJSC, DTEK DNIPROOBLENERGO PJSC, and DTEK DONETSKOBLENERGO PJSC transformed into the DSOs DTEK Kyiv Grids JSC, DTEK Dnipro Grids JSC, and DTEK Donetsk Grids JSC. Independently from them, three power supply companies started to operate: Kyiv Energy Services LLC, Dnipro Energy Services LLC, and Donetsk Energy Services LLC.

Strategic management of the newly established DSOs as well as DTEK POWER GRID LLC and DTEK ENERGOUGOL ENE PJSC will be performed by the operating holding company DTEK GRIDS LLC.

Pursuant to the transitional provisions of the law, the power supply companies in Kyiv and the Dnipropetrovsk and Donetsk regions will serve for a two-year period as universal service providers, which involves a guaranteed supply of power to residential and small non-residential customers, budget-funded institutions as well as other customers with a contracted-for capacity of up to 150 kW at the tariff rates set for them. Coordination of the power supply companies' operations will be done by the independent operating management holding company D.Solutions LLC that we have set up.

We also established the company D.TRADING LLC, which will be responsible for development of the wholesale energy trade in Ukraine and the outside energy markets and will interact with major customers and perform overall management of DTEK's market portfolio.

"DTEK is an active supporter of the electricity market reform. A transparent and clear market is what we need to attract investments into the Ukrainian energy sector and thus enhance our energy independence. We are one of the first companies to complete the unbundling process (separation of the electricity distribution business from the power generation and supply businesses). This enabled our trading function to enter markets in the regions outside our footprint, attract new customers and get prepared for the launch of a liberalized wholesale electricity market. The suppliers have now got an opportunity to establish a European-level customer business. The distribution system operators can in turn focus on improving the operational safety and quality of the networks. The priority for all businesses in the course of the reform will be implementation of innovations and enhancement of the service quality. The Ukrainians will see the first results already in 2019," said DTEK CEO Maxim Timchenko.