The electricity distributors members of the Federation of Associations of Energy Utility Companies (ACUE) are deeply concerned about the negative impact on networks and consumers of the methodology to determine electricity distribution tariffs and the lower regulated rate of return applied to these tariffs, adopted by the Regulatory Authority for Energy (ANRE).
Romania’s energy strategy, under approval process and in alignment with the development directions of the European regulatory framework, highlights the imperative need for investments in the sector, which is in contradiction with the regulatory provisions adopted by ANRE, which will lower the volume of investments and increase the gap between Romania and other EU countries. The electricity and gas distribution sector is strategic for the economy and should be regulated from this perspective; as such, a clear, predictable and stable regulatory framework is required, to stimulate investments in order to increase quality of services to the benefit of consumers.
Without a transparent, clear and stable framework, reflective of market conditions, for the upcoming regulatory period, current investment levels cannot be maintained.
A significant reduction in investments will have as final effect a lower quality of service, affecting the household consumers, the industrial consumers and the competitiveness of the Romanian economy.
Lower investment levels would annul the effects towards improving service quality registered as a result of the approximately EUR 1.2 billion invested over 2014-2017 in electricity distribution networks, respectively lowering average interruption times from 700 minutes to 284 minutes per consumer per year. For this year, electricity distribution operators have ongoing investments totalling around EUR 400 million.
Moreover, the effect of lowering distribution tariffs will be almost null for the final bill of household consumers. For example, a family with standard consumption of around 100 kWh/month will save less than 1 leu/month.
In addition to the impact on consumers, studies show that the new regulations for electricity distribution could lead to a loss of contribution to GDP of RON 13.7 billion and the loss of approximately 4500 jobs in the economy, in the period 2019-2023, which will also lead to lower fiscal contributions paid annually to the state budget by RON 1.2 billion as fiscal revenues from profit taxes and social taxes and contributions.
Based on the principle of transparency in the regulatory process, ACUE had requested ANRE to delay their adoption for six months, to provide the necessary time for a real consultation and a correct analysis of the effect of the proposed indicators, in order to avoid significant risks raised by these regulations to the capacity of operators to undertake investments necessary for the modernization and development of networks and for improving distribution service quality.
For these reasons, the recent approval by ANRE of the regulations for the upcoming regulatory period, for the electricity distribution sector, will not bring benefits to energy consumers but, on the contrary, could affect quality indicators of the distribution service.
Established in May 2012, the ACUE Federation has 30 members, including important groups active in the electricity and natural gas sector, respectively E.ON Romania, ENGIE Romania, ENEL Romania, CEZ Romania, C.N.T.E.E. Transelectrica SA, Electrica SA, WIEE, WIROM GAS, GAZ EST, with a total number of 27,000 employees and annual turnover of over EUR 5.5 billion. The total value of investments by ACUE members over the period 2005-2017 exceeds EUR 10 billion. The impact of member companies’ activity in the economy is significant, indirectly supporting further tens of thousands of jobs.
Source: ACUE press release