Case

On 26 February 2013, the Energy Community Secretariat sent an Opening Letter to Ukraine in accordance with the Rules of Procedure for Dispute Settlement. The Secretariat, takes the preliminary view that the Auction Rules adopted for the allocation of capacity on the country’s electricity interconnectors with its Western neighbours and Moldova, as well as their appliance in practice by the system operator, fails to respect relevant Energy Community rules. Ukraine has been given the possibility until 26 April 2013 to comply of its own accord with the requirements of the Treaty, or to justify its position.

Procedure

Given the importance of cross-border capacity allocation for the establishment of an internal electricity market as pursued by the Energy Community Treaty, the Secretariat decided to initiate the present proceedings under Article 90 of the Treaty. The purpose of this initial step in the procedure is to give Ukraine the possibility to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full factual and legal background of the case.

According to the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat within one month from 26 February 2013. 

Steps taken

On 14 March 2017, the Energy Community Secretariat submitted a Reasoned Opinion in Case ECS-1/12 against Ukraine, for its failure to comply with the rules for allocation of cross-border capacity. Having taken into account the Government’s reply to the Opening Letter, as well as the follow-up activities undertaken for rectifying the breaches identified in the Opening Letter, the Secretariat considers that the argumentation provided therein as well as the developments in electricity sector reform until today do not change its finding of an infringement of Energy Community law. 

Procedure

A Reasoned Opinion is the second step in a dispute settlement procedure initiated by the Secretariat under Article 90 of the Energy Community Treaty. Depending on the Government's reply, the Secretariat may submit the case to the Ministerial Council for a decision on Ukraine’s compliance with Energy Community law.

Ukraine is now requested to rectify the identified issues of non-compliance within a time limit of two months.

After carrying out a preliminary procedure, the Secretariat submitted a Reasoned Request on Ukraine’s failure to comply with the Energy Community’s rules on allocation of cross-border capacity by the Ukrainian transmission system operator Ukrenergo, under the Auction Rules approved by the National Electricity Regulatory Commission (“NERC”), that are closely linked and depend on the electricity market model based on a single buyer operated in place in Ukraine.

With the energy into force of the new electricity market model, allocating capacity at interconnectors for import was allowed, and by implementing non-discriminatory auctions Ukraine ensured compliance with the Ministerial Council decision.