During the examination period from July to October 2019, the Antimonopoly Committee of Ukraine (AMCU) recognized the actions of the DTEK Group (consisting of JSC DTEK Zahidenergo and D.Trading LLC) in the Burshtyn TES trade zone island as an abuse of monopolistic position and imposed the fines on all companies of the group in the amount of over UAH 275.2 million.
This was reported by the AMCU press service.
The “Burshtyn TES" island is a special zone in Western Ukraine within Ivano-Frankivsk, Lviv and Zakarpattia regions. Currently, this territory is connected to the European energy systems, but disconnected from the rest of Ukraine. About 90% of electricity on this "island" is generated by PJSC "DTEK Zahidenergo" which belongs to Ukrainian oligarch Rinat Akhmetov.
The Antimonopoly Committee found out that PJSC DTEK “Zahidenergo”, starting from July 29, 2019, significantly reduced the volumes of electricity offered in the applications for the sale of electricity during the minimum load hours on the "market for the day ahead" (RDN) segment. This led to an increase in sales of JSC “DTEK Zahidenergo” electricity in the "balancing market" segment at higher prices.
In addition, the joint-stock company “Zahidenergo” has set inflated and economically unreasonable prices in the bids for the sale of electricity at RDN during the peak load hours. Such actions could not have been taken without the retention of the significant shares of JSC “DTEK Zahidenergo”. This was facilitated by the practice and experience of LLC “D. Trading” in restricting the access of imported electricity from Slovakia to the trade zone territory of "Burshtyn TES” Island.
During July-October 2019, the “Zahidenergo” company purchased most of the bandwidth capacity, which led to a decrease in the share of imported electricity and, consequently, an increase in the share of JSC “DTEK Zahidenergo” on the territory of “Burshtyn TES” Island. “D. Trading” LLC also benefited from these actions, establishing interdependent prices and binding the electricity prices and prices formed at RDN in bilateral agreements.
All those who live or work on the territory of the energy island have been affected by such actions of energy companies. The business directly received much higher tariffs which have levered its competitiveness. Citizens were subject to PSO, a mechanism that imposes special responsibilities on market participants to ensure that electricity is available to the public. Therefore, they were partially protected from the “hunger games” of energy companies. However, nobody protected citizens from higher prices. They also felt the rise in electricity prices, because every additional penny in the cost of kilowatts was reflected in the prices of most goods produced in these regions.
Based on the results of the investigation and examination, the Antimonopoly Committee of Ukraine adopted a decision recognizing the following:
- JSC “DTEK Zahidenergo” actions during July 29, 2019 - October 2019 in order to reduce the volume of electricity sales on the market "for the day ahead" during the hours of minimum load are considered the violation in the form of abuse of monopolistic (dominant) position;
- actions of JSC DTEK Zakhidenergo in July-October 2019 on the day-ahead market during the peak load hours in the Burshtyn TES Island trade zone regarding the establishment of inflated and economically unreasonable prices in the bids for the sale of electricity at RDN are considered an abuse of monopolistic (dominant) position;
- actions of “D. Trading” LLC in July-October 2019 when participating in daily auctions for bandwidth allocation in the direction Slovakia-Ukraine are considered the actions which have led to JSC DTEK Zahidenergo violations, which in turn, provided LLC D. Trading with additional income
By the decision of the Antimonopoly Committee of Ukraine, JSC “DTEK Zahidenergo” was fined over UAH 176 million for these violations, and LLC “D. Trading” was given more than UAH 99.2 million fine.