District Heating Companies, Bank Account Seizures, and the Risk of a New Debt Crisis in the Electricity Market

Energy Club invites member companies to a closed-door expert discussion on the risks emerging in the electricity market due to the seizure of district heating (DH) companies’ bank accounts and the subsequent accumulation of their electricity debt.

The meeting was prompted by an appeal from ENERGY 365 LLC regarding the urgent need to prevent the debt crisis of the heat supply sector from spilling over into the electricity market.

The problem is that DH companies continue to consume electricity to operate boiler houses, pumping stations, heat substations, cogeneration facilities, emergency services, and other critical infrastructure. However, due to the seizure of their accounts, they are unable to properly fulfill their payment obligations to electricity suppliers.

In this situation, suppliers face a difficult choice: effectively credit a critical consumer without a clear source of payment, or initiate disconnection, which could pose risks for heating season preparations and the continuous operation of heat supply facilities.

A separate risk involves the mechanical transfer of distressed DH companies to the “Supplier of Last Resort” (SOLR). Such an approach does not address the root cause of non-payment but merely shifts the debt burden to another segment of the market, exacerbating risks for the SOLR, NEC Ukrenergo, and the balancing market.

The purpose of the meeting is to discuss a potential temporary stabilization mechanism that would preserve electricity supply to critical infrastructure, ensure payment for current electricity consumption, and prevent the formation of a new chain of debt in the electricity market.

Key discussion topics:

• What is the actual scale of the debt owed by DH companies to electricity suppliers amid account seizures?
• How do DH company account seizures affect current payments for electricity, distribution/transmission services, imbalances, and financial guarantees?
• Can the mechanical transfer of distressed DH companies to the SOLR solve the issue, or does it simply shift the debt to another market segment?
• What could be a protected channel for current electricity payments by DH companies?
• How can current electricity payments be ring-fenced from historical gas debts, tariff differences, and other accumulated liabilities?
• What temporary solutions or amendments to NEURC Resolution No. 332 could help preserve the operation of critical infrastructure without accumulating new debts in the electricity market?

Based on the meeting results, Energy Club plans to summarize the positions of market participants and determine the need to prepare a joint appeal to the Cabinet of Ministers of Ukraine, NEURC, the Ministry of Energy of Ukraine, the Ministry of Communities and Territories Development of Ukraine, the Ministry of Finance of Ukraine, NEC Ukrenergo, Ukrinterenergo, the Naftogaz Group, the Association of Ukrainian Cities, and other stakeholders.

Moderator

Iryna Dmytrotsa

Expert in energy project development and business planning, Head of Operational and Regulatory Policy at Ukrainian Distribution Grids JSC (April 2024 - November 2025)

Speakers

Roman Polishchuk

Managing Director, Kramatorskteploenergo LLC

Pavlo Karas

Director of the Municipal Heating Company “Cherkasyteplo-komunenergo” of the Cherkasy City Council

Oleksandr Stremoukh

Director for Market Operations, NPC Ukrenergo

Yuriy Pidlisny

Head of Energy 365 LLC

Natalia Kravchenko

Head of the Department of Life Support Systems Economics, Ministry of Community and Territorial Development of Ukraine

Oleksandr Smilenko

Head of the Department of Scientific and Technical Development and Regulatory Support, NPC “Ukrenergo”

Andrii Kurmaz

Senior Expert on Regulatory Support, NPC “Ukrenergo”