"Rotterdam Plus" case: new UAH 20 billion episode

On Oct. 26, 2022, NABU and SAPO notified 15 persons of suspicion of involvement in the adoption of the so-called "Rotterdam Plus" formula and its further application, which led to electricity consumers illegally overpaying more than UAH 20 billion during 2018-2019. This is the second episode of a large-scale investigation by anti-corruption authorities. The investigation of the first episode, involving six suspects and illegal overpayment of over UAH 19 billion UAH during 2016-2017, was completed in September 2022.

The suspects in the new episode include:

• 2 former heads of the National Energy and Utilities Regulatory Commission (NEURC);
• 7 former NEURC members;
• 2 active NEURC members;
• 1 active and 1 former NEURC employee;
• 1 incumbent and 1 former official of a group of private heat-generating companies.

Six of these persons, who knowingly participated in the crime, are suspected under Part 2 Article 364 of the Criminal Code of Ukraine. The actions of NEURC members, who, without understanding, voted for the application of the "Rotterdam Plus" formula, fall under Part 2 Article 367 of the Criminal Code of Ukraine. The investigation believes that they improperly performed their official duties, which caused serious consequences for state and public interests.

As established, the so-called "Rotterdam Plus" formula, which was approved in 2016 by the NEURC to calculate the wholesale market price of electricity, contained expenses that never existed, namely the transportation of coal to Ukraine from the port in Rotterdam. The use of this method of calculation in 2016-2019 made consumers overpay more than UAH 39 billion, which is confirmed by an expert examination.

As reported, the representatives of the group persuaded the NEURC to adopt such a calculation formula to receive excess profits. At first, the NEURC did not agree, realizing the absurdity of including transportation costs in the tariff, but in March 2016, it accepted the proposal. This resulted in an increase in electricity tariffs for industry, social infrastructure facilities, and entrepreneurs, which led to a rise in the price of goods and services for the final consumer, including basic necessities.

According to Article 62 of the Constitution of Ukraine, a person is considered non-guilty in the commission of a crime and cannot be subject to criminal punishment until he or she is found guilty by court.