Power

Moldovan regulator’s new electricity distribution tariff methodology

On March 9, the Moldovan regulator (ANRE) published an electricity distribution tariff methodology for 2018-2023 in the Official Journal. This methodology will replace the previous one, which is subject to an infringement procedure in Case ECS-9/17. During the drafting process, the Secretariat and an international tariff expert funded by the European Union ensured compliance with the Energy Community acquis and European best practices. On March 14, the Secretariat, upon invitation by the International Monetary Fund, assessed the final methodology as compliant. If properly applied, the new methodology will be a key element for stability in Moldova’s electricity sector and regaining investors’ trust.

Deputy Director Dirk Buschle thanked ANRE, under the leadership of Director General Tudor Copaci, for the open and fruitful discussions during the drafting period. “Today’s positive assessment is a proof that ANRE may again become the reliable partner that the energy sector of Moldova as well as investors and the international community need for their operations in Moldova”.

However, in order for the tariff methodology to take full effect in practice, changes in the electricity law are still needed. Currently, the Moldovan electricity law sets a cap on the recognition losses, which impedes on ANRE’s independence when setting tariffs.

On February 28, the Secretariat published an update of its 2016 review of the Moldovan national regulatory authority’s (ANRE) independence and performance. The Secretariat notes that the appointment of the new director general was made in a more transparent and neutral procedure than in the past. Moreover, Moldova’s legal framework broadly complies with the Third Energy Package, albeit with a few notable exceptions which require remedy. For example, the 2016 Electricity Law contains rules on how losses incurred by distribution system operators are calculated, thus impeding the autonomy and independence of ANRE when designing tariff methodologies.

The weaknesses identified by the Secretariat in its 2016 report led to the conclusion of an Action Plan the Moldovan authorities committed to in December 2016. The updated report published in February, 2018 follows up on the deadlines and deliverables in the Action Plan and provides an analysis of ANRE’s latest activities. The Secretariat is ready to assist ANRE in order for the remaining areas covered by the Action Plan to be successfully implemented, most prominently when it comes to updating ANRE’s internal regulations, conducting audits, designing performance indicators and publishing transparency reports.

 

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