Romania gradually returns to the power and natural gas market liberalisation

Romania

Early this January, the government has decided to void some measures adopted almost a year ago regarding the energy market (please see our Law-Now article on this topic). Government Emergency Ordinance 1/2020 (GEO) provides for amendments applicable to previous fiscal-budgetary measures targeting not only the energy sector, but also public administration, banking and other sectors.

Regarding the energy market, the aim of the GEO is to enact the first restoration measures for a free market, including:

  • Eliminating the 2% contribution from the annual turnover that energy companies were required to pay the National Energy Authority (ANRE).  As a consequence, ANRE has adjusted the energy distribution and transportation tariffs to reflect such change. Before the adoption of GEO 114/2018, this contribution was 0.2%.

  • Limiting the applicability of the fixed price of domestic gas to 68 lei (EUR 14) per MwH until 30 June 2020. GEO 114 provided that the 68 lei/MwH price be maintained until February 2022. This measure applies only if the average market price, monitored by ANRE, taking into account the quantities and prices recorded on each market segment, is above the value of 68 lei / MWh.

  • Household customers will benefit from regulated electricity prices until 31 December 2020 (instead of 28 February 2022 as previously implemented).

  • Repealing the provisions related to the regulated rate of return of 6,9% used for the calculation of the electricity and natural gas transmission and distribution tariffs, starting with 30 April 2020. The regulated rate of return of 6,9% was introduced last year for the current regulatory period through GEO 19/2019 amending GEO 114/2019.

  • The obligation of electricity producers to sell to last resort suppliers at regulated tariffs to ensure household consumption will apply only until 31 December 2020 (instead of 28 February 2022 as previously stated).

For more information on this eAlert, or local CMS experts Varinia Radu or Ramona Dulamea.