The Federation of Associations of Energy Utility Companies (ACUE) warns that significant deterioration in the financial position of energy suppliers and distributors poses a major risk to the entire energy sector, with major repercussions throughout the economy. Two weeks ago, the government was talking about analyzing the possibility of overtaxing suppliers and distribution companies, but it would have virtually nothing to tax, following the new cap law, the profit being either small or non-existent – suppliers losing money.
“I don’t know if the project on overtaxing suppliers and distributors has been circulated, we also heard about it two weeks ago in the press, we don’t know if it would have continued… If he had done it, I’m afraid they would take what we don’t have, as they did with the wind industry some time ago,” the head of a supply company told Energynomics.
At the same time, the ACUE federation of utility companies says that “the ambiguities generated by the legislative framework through ambiguous regulations, the introduction of additional costs in a discriminatory manner, the uncertainty of full and timely recovery of the amounts provided by current legislation are a major risk that may lead in a very short time to the significant deterioration of the financial situation also for the big economic operators in the area of supply and distribution,” and, with them, the whole economy could be pulled down.
The cap law does not reflect the real costs of suppliers and will lead to immediate losses of hundreds of millions of lei, on average, for each supplier, an undesirable situation that would generate a strong negative reaction in the entire energy sector.
Moreover, ACUE emphasizes that the measure of capping prices on the supply segment, ordered by the Romanian authorities, does not comply with national legislation (Energy Law 123/2012 with subsequent amendments and completions – art. 80) and does not correctly apply EU legislation. Given that the regulated tariffs in the final price component are different depending on the distribution operator, the measure also leads to a differentiated treatment between suppliers.
Also, the method of calculating the reference price for establishing the amounts compensated by the Romanian state does not reflect the real value of the amounts to be recovered, leading to significant additional costs for suppliers, in a discriminatory way, states the quoted source. The direct impact of a partial compensation for energy suppliers translates into a severe risk of insolvency or bankruptcy and unprecedented damage to the operational cash flow, leading to the inability of suppliers to continue their activity.
“Most European countries apply support schemes for energy consumers, but Romania is the only country that has chosen to transfer this important financial effort to suppliers. The challenges of the supply sector come in the context of an unprecedented situation facing energy distribution operators. They are forced to buy the electricity needed for the operation of the network, being exposed to the extremely high costs on the wholesale market, not reflected in the tariffs set by ANRE. In the case of electricity networks, this situation has dramatically affected the cash flow, of the order of billions of lei, forcing distributors to reduce investments. The obligation to perform a public service cannot generate losses for the operators. In line with European provisions, the regulatory framework must ensure, in a timely manner, the financial viability of distribution companies,” adds ACUE.
