Establishing the average settlement price for electricity suppliers is an unconstitutional provision, contrary to European and national legislation, and the implementation of the new measures cannot be done overnight, but only after an interval of at least 30 days, states the ACUE federation, after the publication of the new amendments to GEO 27.
“The support scheme is extended until August 31, 2023, but there is no budget impact study or guarantee of budget allocations in the documents published by the authorities. No immediate solution is proposed to ensure the energy necessary for the operation of the distribution networks,” ACUE members claim.
The amendments of GEO 27/2022, in the published form, will lead to a significant deterioration of the financial situation of economic operators in the area of energy supply and distribution, as they impose significant financial and economic losses on them, not recognized by the method of reimbursement or in the distribution tariff.
The supply and distribution activity already registers losses of hundreds of millions of euros, as an effect of the legislation in force. Ignoring the real costs goes against constitutional principles, European and national legislation in the field.
The value of the weighted average electricity settlement price was established non-transparently and below market prices, recorded on trading platforms and highlighted in OPCOM reports. The authorities have full visibility into price developments on the wholesale electricity market, but have not shown any calculations to support the values included in the new regulations. The reality is completely different, and the authorities know the price level at which purchases have already been made. ACUE considers it a cynical decision, the expression of a lack of consideration towards the business environment.
“Losses cannot be imposed as an effect of the legislation. Any intervention in price formation must not result in additional costs for market participants in a discriminatory manner. Such decisions must be clearly defined, transparent, verifiable and non-discriminatory,” says Daniela Dărăban, Executive Director of ACUE, the Federation of Associations of Energy Utility Companies.
After months of accelerated price increases in the wholesale market, during which the authorities passively assisted, overnight a maximum price was set for settlement of the support given to electricity consumers, below the market price and below the cost paid by the suppliers.
The ACUE Federation understands the need to introduce control mechanisms to ensure the avoidance of inappropriate slippages in the value chain of the energy sector, but these measures must be within the constitutional limits, aligned with the legislation in the energy field and calibrated according to the role and challenges of each sector from the energy field.
“With all responsibility, we feel obliged to draw attention to the risk that, in the very likely situation in which some electricity suppliers will end up unable to fulfill their public service obligations, the specific last-resort supplier mechanisms will no longer operate effectively and efficiently. Taking over a very large portfolio of customers by the other designated operators will not be possible, given the precarious financial situation of all energy suppliers and the fact that the lack of liquidity will not allow additional purchases of electricity, at current market prices wholesale,” claim ACUE officials.
At the same time, for the energy distribution activity, the adopted solutions come with a delay of 6 months and partially address the critical situation in which the distribution operators have reached. For the period in which it was decided to freeze the tariffs, the solution of capitalizing the cost differences through “regulated asset” is corrected, which will be recognized later over a period of 5 years, but no immediate solution is proposed to ensure the energy necessary for the operation of the electricity distribution networks.
“ACUE requests a review of the new changes to avoid total market blockage and discontinuities in the supply of energy to customers. It makes a new call for accountability and genuine collaboration between authorities and industry to jointly analyze data and make the right decisions. The situation is critical, far too serious and directly affects the continuity of supply and distribution services.”
