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AFEER: Nowhere in the EU there was the change from the free energy market to regulated prices so suddenly and without consultations

No country in the European Union came back to regulated prices for energy after the deregulation of the market so suddenly and without any consultation with the specialists on the market as Romania wants to do it, stated Ion Lungu, the chairman of the Association of the Suppliers of Electricity in Romania (AFEER).

This, in the context where the government approved on 21 December 2018 the emergency ordnance 114 which includes the coming back to regulated prices for all household consumers of energy between 1 March 2019 – 28 February 2022, the measure which was announced three days before.

The deregulation of the energy market started on 1 July 2013 when 10% of the quantity of energy supplied to the household consumers was acquired from the free market, and the whole process of deregulation was finalized on 31 December 2017.

‘The biggest issue is the market which found out about it over night and there are a lot of contracts on the market already signed both with producers and suppliers who had the obligation to acquire huge quantities of energy, especially after the crisis of the winter 2017’ Lungu said.

According to it,  the deregulated market of energy in Romania worked well enough until now with the competition even higher between suppliers. These, in the effort to draw as many household clients as possible practiced discounts of prices and all kinds of offers as well as energy in a package with other services, gas, mobile phones and service.

‘Everything will take to the drains which is a serious trouble on the market’ Lungu said.

Asked if there were any other cases in the  EU when they came back to the regulated prices after the deregulation of the market Lungu said’ There were interventions, but not as much as that, namely not so suddenly and without consulting the specialists in the market and the operators’ .

According to the data supplied last summer by the National Authority of Regulation in Energy (ANRE) the number of household consumers of electricity who left the regulated market and chose to sign new contracts on the free market increased ten times between 31 December 2016 – 31 March 2018 getting to almost 1.2 million.

Thus, if at the end of 2016 the number of household consumers in competition regime was 128.692, one year later, at the end of 2017 it got to 901,854. Moreover, in the first three months of previous year, namely the first three months of the free market, the trend continued and the number of household users on the free market reached 1,189,528.

As a total, in Romania there are 8,869,569 energy consumers, out of whom 8.5 million household and 342,727 non-household ( industrial).

On the other hand, Lungu said that another provision  of the OUG 114/2018 will affect the sector of energy supply, respectively the contribution of 2% from the turnover which all the licenced companies of the ANRE have to pay to the budget of the authority.

Lungu explained that no energy trader will be able to pay this contribution as their net margins are of at most 1-1.5%.