Tariff = Expenses + Income (investments) + VAT

Expenses – the major part of a tariff (may reach 80%). This includes expenses for fuel, electricity, labor, etc. An increase in these items leads to an increase of tariffs.

Income (investments) – the part of the tariff which is allocated for improving the technical condition of the equipment and networks, as well as for ensuring the proper quality of services. In the current tariffs for the populace, this component is absent or minimal (though there are no legislative restrictions for its share in %).

VAT (value added tax) – mandatory component in the amount of 20% which is set by the state.


The main reason for the quick increase of tariffs is that tariffs were kept artificially low in the past. Despite the fact that the market price for energy resources was permanently growing, Ukrainians for decades received bills with understated numbers on them.

In the Soviet era, and since Ukraine gained its independence, the lion’s share of communal services cost was reimbursed to the utilities by the government. But these government donations were not sufficient even to cover expenses, not to mention the modernization of the networks and the procurement of new equipment. In such conditions, it is extremely difficult to ensure the proper quality of services.

Now that the government of Ukraine has stopped all donations to the utilities, the necessity of a timely and substantiated tariff increase is one of the most important issues for ensuring proper service levels. The residents of European countries, for example, always paid the full cost of communal services, and therefore the services were on a proper level.

Inflation may also have an impact on tariff increases. Changes in the prices for the main resources used in the provision of communal services should be reflected in tariffs.


For most Ukrainians, electricity consumption is metered by a single-tier meter. Tariffs and, accordingly, payment for electricity depends on the amount of consumption per month.

For example, for the largest category of electricity consumers – the populace (including the residents of buildings equipped with electrical stoves and in rural areas) − from 1 March 2017, the following tariffs are effective:

Up to 100 kWh/month (inclusive) with VAT

90 kop./kWh

Over 100 kWh/month with VAT

168 kop./kWh

You can save your family’s money by installing a two-tier or three-tier meter. For example, a two-tier tariff allows you to measure consumption over two periods – “day” (from 7.00 a.m. to 11.00 p.m.) and “night” (11.00 p.m. − 7.00 a.m.).

The coefficient for calculating the electricity tariff in the day time is 1, at night time – 0.5. Simply stated, if you switch operation of your energy intensive household appliances which do not require permanent oversight to the night (11.00 p.m. − 7.00 a.m.), the payment for electricity consumed by these appliances will be calculated at the lower tariff.

The three-tier tariff is applied to sort rates by three time periods: “peak” period in the hours of maximum load of the energy system, “semi-peak” and “night” in the hours of minimum energy system load.

A three-tier tariff maximizes savings for those who consume a lot of energy between11.00 p.m. − 7.00 a.m., as the night tariff is even lower (coefficient 0.4) than in the two-tier tariff (coefficient 0.5).

Time periods

Duration of period

Tariff coefficient


7.00 a.m. – 11.00 p.m.



11.00 p.m. – 7.00 a.m.


However, under the three-tier tariff, the “peak” hour rate has a coefficient of 1.5.

Time periods

Duration of period

Tariff coefficient


8.00 a.m. – 11.00 a.m.
8.00 p.m. – 10.00 p.m.



7.00 a.m. – 8.00 a.m.
11.00 a.m. – 8.00 p.m.
10.00 p.m. – 11.00 p.m.



11.00 p.m. – 7.00 a.m.


It is important to note that according to the decision of the Government (Resolution of the Cabinet of Ministers # 591 of 08.23.2016), the procedure of installing a multi-tier electricity meter was simplified. In particular, consumers can now purchase the meter independently, instead of buying it only from the Oblenergo utility, and clear parameters were established.


If you have no water meter, the amount of water consumption is determined by set norms. The norms on water consumption are set by the local self-government bodies depending on the type of housing stock equipment (equipping of apartments with sanitary and technical equipment).

The tariffs for district hot water supply services are differentiated today depending on the availability/absence of heated towel rails.

The growth of electricity tariffs and of the minimum salary amount have the highest impact on the tariffs for district cold water supply and sewage services. Also, expenses for electricity and payroll with deductions to social funds account for up to 60% of the tariffs for district cold water supply and sewage services.


Generally, if there is no heat meter, calculating the heating tariff should be multiplied by the heated space of the apartment, and for heating with the heat meter – the heating tariff should be multiplied by the amount of heat consumed a month in Gcal and metered by the meter. But there are several specifics to calculating a heating bill:

•    consumers pay for heating not only their apartments but also of the common areas;

•    from 2015, a re-calculation of the cost of the district heating service was introduced – depending on the outdoor air temperature (Resolution of the Cabinet of Ministers # 1037 of 10.30.2015); and

•    in the 2016/17 heating season, the specifics for calculating the payment for the district heating service provided to the populace are effective if there are no heat energy meters in the apartment (garden cottage) and at the inlets to multi-apartment building (Resolution of the Cabinet of Ministers # 865 of 11.30.2016).

Tariffs for heating may be one-tier or two-tier. A two-tier tariff consists of semi-variable (payment for actually consumed heat energy) and semi-fixed parts (so called “consumer fee”). The semi-variable part covers the utilities expenses for fuel and electricity, and the semi-fixed part covers the remaining expenses (labor remuneration, repairs, materials, depreciation, etc.) and income (investments).

When a two-tier tariff is valid, the semi-variable part is billed during the heating season, and the semi-fixed part is paid evenly throughout the year. This reduces the burden on family budgets during the heating season.

Two-tier tariffs are widely applied in the European countries and are considered to be best practices. In Ukraine, two-tier tariffs for heat energy and heating services were introduced and are successfully applied in Ivano-Frankivsk, Lviv, Vinnytsia and other municipalities.

One promising system of tariff formation is incentive-based regulation. The tariff is calculated in a manner which ensures incentives for investments and the reduction of inefficient expenses with a guaranteed level of services quality.

We cannot influence tariff policy directly. But we can become responsible owners, and can reduce the consumption of energy resources the bills for which are growing rapidly

Become responsible owners of your building!

1. Install meters
2. Conduct an energy audit
3. Establish a condominium
4. Take part in the program of state support for energy saving and return up to 70% of funds invested in the materials and equipment. Learn more at the SAEE web site: www.saee.gov.ua

Implement energy efficiency measures based on energy audit results!

1. Install an individual heat substation
2. Replace the doors and windows with energy saving ones
3. Insulate your building
4. Install motion sensors and energy saving lamps in common areas
5. Use alternative energy sources

Learn to be economical and energy saving!

1. Use energy saving home appliances (not lower than А class)
2. Turn off lights when leaving the room; unplug electrical equipment when not in use
3. Do not waste water: close the tap when you brush your teeth; take a shower, not a bath; install aerators on the taps

Become responsible owners of your building!

1. Concern yourself with the issues of tariff formation and setting*
2. Study the legislation
3. Use the rights of housing and communal services consumers, and the right of access to public information
4. Apply for re-calculation when services are not provided or provided not in full volume or their quality is reduced
5. Take part in the public events and discussions

*You can learn more on tariff policy on the web site of the National Energy and Utilities Regulatory Commission: www.nerc.gov.ua, web site of the Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine: www.minregion.gov.ua and web sites of the service providers.

Do not wait for your neighbors to do this – start with yourself