The GEO project proposed for analysis in the Government meeting, from March 15, which regulates distribution tariffs, goes against the principle of independence of the regulatory authority and risks stopping the development of Romania’s energy infrastructure, at an essential and sensitive moment for the sector. Article 2 (2), included in the draft GEO, published in public consultation, on March 13 this year, questions the neutrality of the decisions of the national energy regulatory authority.

According to European and national law, regulators must be independent from both industry and government interests. Thus, the National Energy Regulatory Authority (ANRE) is an autonomous administrative authority, under parliamentary control, decision-making, organizational and functional independent.

Distribution operators carry out a regulated activity. The tariff determination methodology implies the obligation to ensure the financial viability of the distribution companies.

The ACUE Federation understands that the Package of intervention measures, adopted by the Romanian Parliament in 2022, had in mind the observance of a principle agreed at the level of the member states and the measure of freezing distribution and transport tariffs was of a temporary nature, only for the period of April 2022 – April 2023, with the clear understanding that, at the end of this period, there will be a return to the regulations in force, in the present case to the ANRE methodology for calculating and recognizing the regulated tariffs.

“In order to overcome the challenges of the energy transition and security of supply, compliance with the tariff framework is a sine qua non condition for ensuring the necessary investments. The concern of the Romanian state must be oriented towards efficient and future-oriented remuneration and incentive models to enable the transformation of the network and the energy transition. On the contrary, this time, the Romanian state is proposing solutions that will implicitly lead to the blocking and delay of investments in the distribution sector,” says Daniela Dărăban, Executive Director of ACUE.

In the context of the energy crisis, in the year 2022, distribution operators made consistent efforts to ensure the necessary liquidity for carrying out investment and maintenance programs, for the optimal operation of networks, so that the quality of services provided to customers does not suffer. They invested approx. 2 billion RON in electricity distribution and approx. 1 billion RON in the distribution of natural gas, according to data centralized at the level of the ACUE Federation, for the year 2022.

Electricity and natural gas distribution operators invested a total of 10.5 billion lei in the period 2018-2021, according to data published by ANRE.

In order to fulfill the decarbonisation objectives and to keep in line with the evolution trends at the European level, as well as in line with the national legislation (e.g. the “free” of network connections and extensions), the distribution operators have already supplemented the investment budgets for the modernization and expanding networks, connecting new customers, integrating growing renewable energy sources, adapting distribution networks to “H2 ready” standards, integrating electromobility, digitizing and securing distribution systems.

Moreover, the energy distribution sector must benefit from a coherent regulatory framework and aligned with the expectations and demands of customers, who are increasingly interested and encouraged to adopt efficient energy solutions (e.g. prosumers, smart metering), unachievable in the absence of regulations that respect this common objective.

Without a predictable, transparent and fair regulatory framework, Romania risks facing major challenges of energy distribution networks.