The Ukrainian industrial company "Interpipe" is concerned about the decision of the National Commission for State Regulation of Energy and Utilities (NERC) to increase the transmission tariff of NEC "Ukrenergo" by 29.8% starting January 1, 2025. This change will result in higher production costs and a decrease in capacity utilization.
According to the press service of "Interpipe," which spoke to the "Interfax-Ukraine" agency, the company is one of the largest industrial consumers of electricity in Ukraine. Therefore, it is quite natural that any increase in electricity tariffs will lead to a rise in production costs and a decrease in competitiveness in export markets.
This will negatively affect the capacity utilization levels of "Interpipe" factories, consequently leading to a reduction in tax payments to budgets at all levels.
"We view the new 30% increase in the electricity transmission tariff as yet another attempt to shift the problems of the energy sector onto its consumers. It is worth noting that NERC has been raising this tariff for several consecutive years with the same justification: to help "Ukrenergo" pay subsidies to producers of green electricity. However, the issue of cross-subsidization and debts in the Ukrainian energy sector is so chronic and systemic that, as experience shows, mechanical tariff increases do not resolve it," emphasizes the response from "Interpipe's" press service to the "Interfax-Ukraine" agency's inquiry.
Previously, major companies and industrial associations reacted extremely negatively to NERC's decision to raise the NEC "Ukrenergo" transmission tariff starting January 1, 2025. In particular, the Federation of Employers of Ukraine (FPU), supported by the Ukrainian Association of Ferrous Metallurgy Producers ("UkrFAM"), strongly opposed this decision. Companies like "Metinvest" and "ArcelorMittal Kryvyi Rih" also expressed sharp disapproval regarding the electricity tariff hikes.
As reported, NERC has increased the "Ukrenergo" transmission tariff by almost 30% for 2025 and reduced the dispatch tariff by 5.5%. Thus, the National Energy Regulator has set the NEC "Ukrenergo" transmission tariff at 686.23 UAH/MW*h (excluding VAT) starting January 1, 2025. Consequently, the transmission tariff is 29.8% higher than the current rate in 2024 (528.57 UAH/MW*h).
Additionally, the energy regulator has established a transmission tariff for "green" metallurgy at 359.55 UAH/MW*h, which is 1.4% lower than the current rate (currently 364.7 UAH/MW*h).
The dispatch tariff for 2025 has been set at 98.97 UAH/MW*h, which is nearly 5.5% lower than the current year's rate, which is 104.7 UAH/MW*h.
"Interpipe" is a Ukrainian industrial company that manufactures seamless pipes and railway wheels. Its products are supplied to over 80 countries worldwide through a network of trading offices located in key markets in the Middle East, North America, and Europe.
Approximately 10,000 employees work at "Interpipe."
The company's structure includes five industrial assets: "Interpipe Dnipro Pipe Rolling Plant (NTP)," "Interpipe Novomoskovsk Pipe Plant (NMTZ)," "Interpipe Niko-Tube," "Dnipropetrovsk Vtormet," and the electric steelmaking complex "Dniprostal" under the brand "Interpipe Steel."
The ultimate owner of Interpipe Limited is Ukrainian businessman and philanthropist Viktor Pinchuk and his family members.