AmCham Moldova, which brings together 158 members, asks the Minister of Energy Victor Parlicov to reanalyze modifications to Law no. 108/2016 on natural gas, mainly the establishment of the equity component. This is paid by consumers who change supplier in the regulated market for one in the competitive marker, in the form of a one-off charge that includes outstanding tariff deviations.
Equity component
As, end consumers can choose a supplier from the competitive market. The introduction of the equity component is considered by AmCham Moldova as an obstacle to the liberalization of the natural gas market. In a public letter addressed to the Minister of Energy, the organization refers to European Directive 73 of 2009 on common rules for the internal market in the natural gas sector, according to which “the security of electricity supply is an essential element for public safety and is therefore inextricably linked to the efficient functioning of the internal natural gas market and the integration of the isolated natural gas markets of the Member States”. One of the fundamental principles of good governance in the gas market is that consumers’ interests are paramount.
“In the context described above, the establishment of the equity component, in the proposed version, could condition a distortion of prices on the gas market and violate the principle of equality between consumers, that is, those who prefer to use their right to change their supplier they are discouraged from doing so, being required to pay an additional payment in addition to paying the tariff for the gas consumed, which is not compatible with the principle of market liberalization. On the other hand, by paying that tax, consumers are forced to pay for a service they did not benefit from.”
Tariff deviations
In order to respond to natural gas price increases from Q4 2021 to Q4 2022, the mechanism for establishing regulated supply prices in the Republic of Moldova did not fully cover the prices paid by suppliers upon purchase. This year, ANRE decided to adjust regulated prices more frequently. Also, the so-called tariff deviation was introduced, as a component to correct the regulated income of the regulated supplier (Moldovagaz). The tariff deviations are calculated by ANRE Moldova based on a methodology which also refers to the estimate of the sale price of natural gas for the future interval.
With the decrease in reference prices for natural gas, consumers are encouraged to switch to the competitive market, at prices sometimes twice lower than the regulated ones.
AmCham does not ignore the problem of the accumulation of tariff deviations, but proposes to identify another solution. “Currently, the calculations are based on current deviations, which are of an estimative nature, but the real costs of natural gas for the current year are not known up to date. The need to establish the equity component will decline, and consequently the accumulation of tariff deviations will be avoided, when interventions to adjust regulated tariffs and prices will be more frequent.”
The organization also contests the reason for establishing the prohibition applied to the consumer to return to the supplier in the regulated market within a period of less than 12 months from the termination of the contract. “The cumulation of the obligation to pay the equity component by consumers with the limitation to return in a period of less than 12 months constitutes a double burden on them, which is already vulnerable to price fluctuations in the current geopolitical conditions”, writes AmCham Moldova.
The American Chamber of Commerce in Moldova (AmCham Moldova) is a non-governmental non-profit organization comprising 158 members from a diverse spectrum of businesses; from large foreign investors to small enterprises, that operate domestically and abroad.