Residents of Kyiv are increasingly complaining about excessively high amounts in their utility bills, particularly for services provided by KP ‘Kyivteploenergo’. This company is the largest producer of thermal and electrical energy in Ukraine and supplies heating to the entire city.
This is reported by Kyiv24
Financial Opacity and Capital Increase
Public access to the financial statements of ‘Kyivteploenergo’ is currently limited — the company cites legislative restrictions on the dissemination of information during martial law. However, some financial decisions have still become publicly available. In particular, last year the Kyiv City Council made a decision to recapitalize the enterprise — the charter capital was increased from 5 to nearly 8 billion hryvnias. For this, the city obtained a loan from the European Bank for Reconstruction and Development amounting to 50 million euros for a term of 5 years, which is equivalent to approximately 2.5 billion hryvnias.
According to the adopted decision, the repayment of this loan will be made from the city budget, meaning it will effectively be at the expense of taxpayers — the residents of the capital. In addition, the Kyiv Council is also counting on receiving a grant from the EBRD of 5 million euros to support the enterprise. Representatives of ‘Kyivteploenergo’ explain the need for additional funding by the debts of consumers who do not pay for heating services.
Formation of Tariffs and Justification of Their Size
Journalists have found that ‘Kyivteploenergo’ independently determines the size of the heating tariff, adding to it costs related to heat losses in the networks. It has been reported that the tariff includes a loss level of 27 percent, meaning that more than a quarter of the produced heat is considered to be ‘lost’ on the way to the consumer. Accordingly, these costs are passed on to the consumer and the city budget.
‘Kyivteploenergo’ declares network losses at the level of 27 percent. This means that more than a quarter of the heat is supposedly ‘lost’, and these losses are included in the tariff. Consequently, the consumer and the budget pay for this. This is a scheme amounting to at least 2–2.5 billion hryvnias a year, as according to the methodology, only 13 percent of losses can be included in the tariff. The elimination of state control has led to such manipulations,” notes expert Oleksiy Kucherenko.
Thus, a significant portion of the amount in the bills is formed precisely due to the inclusion of inflated heat losses and the financial obligations of the enterprise in the tariff. Experts emphasize that only half of the current level of losses should be accounted for in the tariffs, while the rest is a consequence of the lack of proper control over the activities of the monopolist.