Balancing neutrality

In accordance with the amendments to the Gas Transmission System Code, introduced by the resolution of the National Energy and Utilities Regulatory Commission of 30 September 2020 No. 1779, starting from October 2020:

the balancing neutrality charge is determined in proportion to the volume of gas transmission of the network user for gas month M, except for the volumes of transmission of natural gas transported in the customs transit regime and customs regime of customs warehouse (ОВГ), which is determined by the formula:

ОВГ = MAX (ВХІД + ТС(ВХІД); ВИХІД + ТС(ВИХІД) – MIN (ТС(ВХІД); ТС(ВИХІД)),

Where

ВХІД + ТС(ВХІД) – the sum of gas supply volumes at the entry points into the gas transmission system, taking into account the volume of gas acquisition in the virtual trading point for the gas month M, m3;

ВИХІД + ТС(ВИХІД) – the sum of the volumes of gas offtakes at the exit points from the gas transmission system, taking into account the volumes of gas alienation in the virtual outlet for the gas month M, m3;

ТС(ВХІД) – the total volume of gas acquisition in the virtual trading point for the gas month M, m3;

ТС(ВИХІД – the total volume of gas alienation in the virtual trading point for the gas month M, m3;

MAX (ВХІД + ТС; ВИХІД + ТС) – the maximum value of the two values;

MIN (ТС(ВХІД); ТС(ВИХІД)) – the minimum value of the two values.

The balancing neutrality charge (НП) is calculated separately for each network user according to the formula:

НП = СПН x ОВГ,

where СПН is the balancing neutrality charge rate for gas month M, UAH/m3;

The balancing neutrality charge rate (СПН) is determined by the formula

СПН = (ВТ-ДХ)/СОТ,

where ВТ – costs of the gas transmission system operator for the gas month M, calculated in accordance with the provisions of the GTS Code provisions, UAH;

ДХ  – revenues of the gas transmission system operator for gas month M, calculated in accordance with the GTS Code provisions, UAH;

СОТ – volumes of natural gas transmission of network users for gas month M, which is determined in accordance with the first paragraph of point 6 of Subsection 8 of Section XIV of the GTS Code, taking into account amendments made by the National Energy and Utilities Regulatory Commission of 30 September 2020 No. 1779, m3.

Information on costs and revenues that are taken into account when calculating the fee for neutrality balancing, the total amount of the fee for balancing actions, the rate of the fee for neutrality balancing, the total amount of the fee for neutrality balancing, for gas month M are given in a table:

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By October 2020

Balancing neutrality (НП) charge is calculated separately for each network user using the formula

НП = СПН x ОВГ,

where СПН is the balancing neutrality charge rate for the gas month М, UAH/m3;

ОВГ – the volume of natural gas transported by a network user for the gas month M, except for the volumes of natural gas transported under the customs transit regime and the customs regime of the customs warehouse, m3.

The balancing neutrality charge rate (СПН) is determined by the formula

СПН = (ВТ-ДХ)/СОТ

where ВТ – expenses of the gas transmission system operator for the gas month М, calculated in accordance with the GTS Code provisions, UAH;

ДХ – income of the gas transmission system operator for the gas month M, calculated in accordance with the GTS Code provisions, UAH;

СОТ is the total volumes of natural gas transported by network users for the gas month M, calculated in accordance with the GTS Code provisions, m3.

The balancing neutrality charge rate can be:

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The calculation of the neutrality rate and the neutrality charge is for informational purposes only and does not bear any financial obligations. Now the TSO is holding consultations with the NEURC on the methodology for calculating the neutrality rate.

The TSO through the information platform informs each network user on the amount of money that should be collected from network users (if the balancing neutrality charge rate is greater than zero) or paid to it (if the balancing neutrality charge rate is less than zero) as a balancing neutrality charge per month M.

Stages of implementing the balancing neutrality

Gas year Period Calculation and publication of information Payment term
2019-2020 2020/2021 01.03.2020 – 30.09.2021 Every month by 21st day of month following the reporting month The balancing neutrality charge is not charged or paid
2021-2022 01.10.2021 – 30.09.2022 Every month by 21st day of month following the reporting month In total for all months of the gas year once a year until 1 January 2023, taking into account paragraph 10 of Subsection. 7 of Section XIV of the GTS Code
2022-2023 01.10.2022 – 30.09.2023 Every month by 21st day of month following the reporting month Until the 25th day of the month following the reporting month, taking into account paragraph 11 of Subsection 7 of Section XIV of the GTS Code