Energy suppliers will suffer losses from the preparation of invoices, as the price set by the new capping ordinance is lower than the costs encountered by companies, and that would mean new insolvencies and bakruptcies in the market, according to a release of the Association of Energy Suppliers of Romania – AFEER.
“The electricity and natural gas suppliers, member companies of AFEER, are prepared and will act for the application of the legislation, respectively of all the measures for capping and compensating the bills. Unfortunately, GEO 3/2022, which comes with additional measures to support consumers, introduces provisions that will have a disastrous effect on suppliers,” says Laurenţiu Urluescu, President of AFEER.
According to the association’s estimates, the financial impact of the support scheme far exceeds 3 billion lei, an amount communicated by the authorities as being allocated for this scheme.
“Therefore, we call on the authorities to make the settlements correctly and on time, in accordance with the legal provisions, avoiding the risk that suppliers will no longer be able to financially support the state support for consumers and thus there will be delays in payment throughout the energy chain.”
The new GEO 3/2022 brings additional problems to suppliers. The final billed price of electricity established by the Ordinance has a lower value than that required to cover all components of the final price. All other components of the final price are set either by ANRE (transmission tariffs, distribution, green certificates, cogeneration bonus), or by organic laws (VAT and excise, by the Fiscal Code). The value of the final price, imposed by GEO 3/2022, does not even cover the regulated taxes and tariffs established for 6 of the 8 distribution areas in the country. Same is valid for the costs of supply and coverage of imbalances compared to the consumption forecast.
“Thus, according to the provisions of GEO 3/2022, suppliers are obliged to bear part of the regulated tariffs. Which is not correct! Even from the preparation of invoices, suppliers will have losses. And the accumulation of losses, to which is added the lack of liquidity caused by the fact that the authorities have not reimbursed the amounts for compensation and capping, will lead the suppliers to insolvencies and bankruptcies! More than 50% of natural gas suppliers have already given up this activity. There is a risk that most electricity suppliers will give up, voluntarily or compulsorily, because they will not be able to sustain this loss-making activity!,” say the suppliers.
AFEER demands that the legislation be complete, simple, clear and for the benefit of the entire energy sector, from producer to consumer, so that the population and companies in Romania can get through this period of crisis as well as possible.