Increasing electricity tariffs: what kind of payments will there be and where will the money go?

Ukrainians this month consume electricity at a new tariff, which is 4.32 hryvnia per 1 kilowatt-hour, which is more than one and a half times higher than the previous tariff.

The rise in price of light occurs against the backdrop of many hours of outages, which, in theory, should help reduce consumption. “Apostrophe” found out whether citizens are now really saving more on electricity, how much households will have to pay for electricity in July, and where the money raised from price increases will go.

Ukrainians have been living with the new electricity tariff for almost a month. Let us remind you that from June 1, the Ukrainian government increased the electricity tariff for the population from 2.64 hryvnia per 1 kilowatt-hour to 4.32 hryvnia per 1 kilowatt-hour.

Despite the fact that the price of electricity for consumers still remains below the market price, the June increase turned out to be very significant. And this increase promises to not be the last, since the current tariff will be in effect only until the end of April 2025.

Until our citizens feel the increase in the cost of light on their wallets, receipts for payment for the new tariff will only arrive in July. But now it is possible to calculate, at least approximately, how much you will have to pay for electricity, which is increasingly becoming a luxury rather than a necessity.

For example, a single person who consumes an average of 50 kilowatt-hours per month paid 132 hryvnia at the old tariff in June, while in July he will have to fork out 216 hryvnia.

If a family consumes 100 kilowatt-hours per month, then instead of 264 hryvnia paid in June, next month they will need to find 432 hryvnia for this. Well, if in the house they don’t save on electricity, as they say, and its consumption is, for example, 200 kilowatt-hours monthly, then the payment for an impressive 528 hryvnia will change to an even more impressive 864 hryvnia.

Below the (energy) poverty line

The amount in the payment depends not only on the tariff itself, but also on the volume of consumption. Logically, a rise in the price of light should encourage consumers to save more, which would be reasonable given the shortage of generating capacity due to Russian missile attacks.

However, given that in the last month the country has been without electricity for almost half a day, predicting who will consume how much and, accordingly, how much they will pay for it, is quite problematic.

The head of special projects at the Psyche scientific and technical center, Gennady Ryabtsev, believes that by the end of June there will be a reduction in consumption.

“But whether it will be because of limits or because of rising prices is very difficult to say,” he added in the conversation.

In fact, due to long-term blackouts, we are faced with a forced reduction in electricity consumption. However, when electricity appears in homes, they try to use it to the maximum for charging all available devices, including chargers, as well as washing, heating water with boilers (after all, now is also the traditional period of preventive maintenance to ensure hot water supply), and refrigerators are freezing that there is strength, given the summer heat.

Therefore, it is possible that electricity consumption will be no less than before, when we paid for it at a lower tariff.

According to the head of the Union of Utility Services Consumers, Oleg Popenko, in conditions when power outages occur on average for eight to ten hours a day, it is impossible to achieve an additional reduction in consumption.

“In such a situation, the consumer’s psychology is completely violated - he has no control over the issue of reducing consumption,” the expert explained in a comment to the publication.

In addition, he added, Ukrainians, in accordance with European standards, already consume little energy. According to the expert, today about 80% of our citizens use up to 175 kilowatt-hours of electricity per month, and of these, 15-18% consume up to 100 kilowatt-hours.

“And this is already below the level of energy poverty - this is such a category of calculations in the European Union. So where can we go lower?” - said Popenko.

What will the money be used for?

In any case, the amount of payments for electricity will increase next month - even if its consumption decreases. And here the important question becomes: where will this money go?

“They will be used to generate working capital and for ongoing repairs,” says Gennady Ryabtsev. — That is, this money will not be used to restore what was destroyed. This is, for example, if a tree has fallen and needs to be removed and the power line restored - for such needs, nothing more.”

According to him, these funds, firstly, were not initially intended to carry out large-scale work to restore the destroyed energy infrastructure, and, secondly, these are simply incomparable amounts.

You need to understand that consumers pay money for electricity to specialized companies - “universal service providers”, and now these companies will receive more money for their services.

“The state always delayed payments to universal service providers to compensate for the difference (in tariffs) - the population paid 2.64 hryvnia, and they charged 8 hryvnia. And at the beginning of June, the debt to them was about 9 billion hryvnia. Therefore, starting next month, part of the money will remain with these companies,” explains Oleg Popenko. — Also, the money will be redistributed to Energoatom and Ukrhydroenergo (it is these two state-owned companies that cover the difference in tariffs from their own funds - “Apostrophe”). Accordingly, due to the increase in tariffs, payments from Energoatom and Ukrhydroenergo to the accounts of universal service providers will decrease. And the budget in this situation is somewhere very far away, you can’t even see it with binoculars.”

However, there is no tragedy in this, the expert is convinced.

“We have more than enough money for restoration. The Ministry of Energy officially says that they have collected 600 or 700 million euros. We also separately have lending from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) - 300 million euros each,” summarized Oleg Popenko.

We would like to add that the main thing in this situation is to wisely manage the available financial resources and effectively prepare for the winter. Otherwise, the volume of electricity consumption will tend to zero - as well as the amount of money received for it.