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ANRE: Order allowing conclusion of retail contracts with current energy suppliers until March 31 not anti-competitive

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The order of the National Energy Regulatory Authority (ANRE) allowing household consumers to conclude contracts on the competitive market until March 31 only with the current suppliers does not distort competition, but ANRE will examine this aspect together with the Competition Council, ANRE vice-president Nagy-Bege Zoltan said.

The energy regulator has a draft order in the making that allows household consumers to opt until March 31 for setting up a contract on the free market with their supplier, with the tariff in the competitive offer applying as of January 1.

The invoices for the first three months will be settled, but this will only happen if the consumer remains with the current supplier, which could affect the competition in the market, some experts consider.

"We put up the draft order for public debate exactly to clarify these things. Anyone who has proposals and observations can send them in until January 14. In a different thread, there is an ANRE Advisory Council with a representative of the Competition Council also sitting on it. All orders also go through the Advisory Council, and therefore they also reach the Competition Council, which has the possibility to raise these issues and any opinion is welcome. So, we will analyze these aspects together with the Competition Council and our law experts," Nagy-Bege said.

He specified that from his point of view, ANRE's proposal does not violate the principle of competition and does not benefit the current suppliers of domestic customers, allowing the other suppliers to offer the same discount, so as to determine the consumers to sign contracts with them.

On the other hand, Razvan Nicolescu, energy expert and former president of the EU's Agency for the Cooperation of Energy Regulators - ACER, argues that the new ANRE order under which consumers can conclude contracts on the competitive market until March 31 only with their current supplier can seriously affect the competition on the market in the long-term.

"The draft order attempts, to a certain extent, to remedy the mistake related to the fact that people didn't know and didn't have time to conclude a contract on the free market. But the problem is that it introduces elements that could seriously affect competition in the long run and which can be termed as market segmentation or cartel initiation. Essentially, the best offers shown as competitive by ANRE's price comparator, like for instance Hidroelectrica's, are penalized and consumers are determined to choose exactly the current supplier," Nicolescu explained.

 

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The price of electricity for the population will go up, with values between 13% and 26% as of January 1st 2021, when the market will be completely liberalised, thus the Association for Intelligent Energy (AEI) is requesting Parliament to delay the liberalisation by 6 months, according to a press release.

As of January 1st, the Romanian Energy Regulatory Authority (ANRE) will no longer establish prices for home consumers, as these will be calculated by the traditional supplier and they will be named universal service prices. Consumers will either keep their current contracts, at universal prices, which will go up by 13-26%, or they will sign other contracts within the free market.

According to the calculations done by AEI, based on the price comparison on ANRE's website, the biggest price hikes will be for households of Enel Distribution Banat, namely 26%. Following that is Enel Distribution Muntenia (Bucharest included), where electricity price will go up by 23%, Enel Distribution Dobrogea, with price surges of 18%, Electrica Transilvania South and CEZ Distribution, with 17% each.

For the customers of Electrica Muntenia North, prices will go up by 15%, and for Electrica Transilvania North, by 14%, and E.ON Distribution, by 13%.

In the opinion of AEI, the guilty party for this situation is ANRE, which did not inform consumers that the price is about to be liberalised, neither did they prepare the optimum prices regarding secondary legislation.

"Thus, we notice that through the practice of ANRE, they are breaking the requirements of article 55 of Law 123/2012, prices that household consumers are obligated to pay for electricity as of January 1st 2021 are unreasonable, prices that are much larger than market prices", AEI representatives say.

"We appreciate the liberalisation of electricity and natural gas markets should not be actions taken just to add to the check-list as being done, with a disregard for Romanians", AEI experts say.

 

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