The National Regulatory Authority for Energy – ANRE has put in public debate two essential documents for updating the regulatory framework regarding recognizing the costs in establishing the electricity distribution tariffs. According to the draft order published on ANRE’s website, the regulated rate of profitability would decrease from 2019 to 5.07%, compared to the current level of 7.7%, valid from 2014.

ANRE explains in a press release that “the new Regulatory Committee of ANRE pays special attention to the improvement of the regulatory framework, to the transparency of the costs that make up the electricity tariff, in order to establish correct tariffs for consumers”.

The proposed amendments, ANRE explains, are aimed at achieving several important objectives for “increasing the transparency in the establishment and approval of distribution tariffs, as well as for avoiding unjustified costs being included in these tariffs.”

In establishing the value of the regulated rate of return proposed and in complying with the provisions of the primary legislation, ANRE considered “achieving an optimum between maintaining the investment necessary to ensure the quality of the electricity distribution service, with ever decreasing number of interruptions in the power supply, included, and ensuring a reasonable level of the profits of the distribution operators”.

The proposed amendments aim, among other things, at limiting the inclusion in tariffs of service costs incurred by companies affiliated to distributors and a prompt return to consumers of efficiency gains obtained by distribution operators. At the same time, ANRE considers that the measures proposed in the two projects will contribute to

• increasing the level of investment in distribution networks made by concession distributors in order to improve the quality of the distribution service and reduce network losses by differentiated application of the regulated profitability rate for approved / executed investment categories
• completion of investments by the distribution operators at the foreseen level
• stepping up and diversifying measures to reduce losses in distribution networks (reducing the cost of self-consumption)

The two documents are available on the ANRE website and below:

• Proposals for Modification of the Pricing Methodology for Electricity Distribution Service, approved by ANRE Order no. 72/2013, with subsequent modifications and completions, stage II
• Draft Order for establishing the regulated rate of profitability applied to the tariff approvals for the electricity distribution service provided by the concessionaire distribution operators starting with 1 January 2019