The ITC mechanism functions according to the terms defined in the ITC Agreement, compensating transmission system operators for costs associated with hosting transit flows (i.e. facilitating the transfer of power between two countries). This mechanism aims to incentivise the hosting of cross border flows and to facilitate the creation of an effectively competitive pan-European electricity market.

Due to the extraordinary adherence of a new ITC party (Ukrenergo) from 1st of July 2024, a new audit process was launched. Based on this audited data, the transit flows, including the perimeter flows, are calculated (i.e. imports and exports of electricity to and from third countries), contributing to the framework fund and WWT (With and Without Transit) calculations. Perimeter fee is no longer collected on borders between Ukraine and countries - parties of the ITC agreement (Hungary, Poland, Romania and Slovakia).

As a result, the new perimeter fee starting from 1st of July 2024 has been established at 2.50 €/MWh.