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Opposition tries to amend GEO 114/2018, PSD manages to block the return to free markets

Deputies from the Committee of Budget postponed discussions on GEO 114/2018, with subsequent changes, after the members of the Committee for Industry had previously voted to eliminate the provisions with major impact on the energy markets. During Tuesday’s meeting, ALDE and UDMR representatives in the Committee did not attend, which allowed PSD representatives to have the final say.

The elimination of the provisions of GEO 114 could still occur soon, but it all depends on the involvement of the 24 deputies in the commission: 10 PSD, 7 PNL, 2 USR, 2 minorities, 1 UDMR, 1 ALDE and 1 PMP. Theoretically, in a unanimous participation, the PSD could count on a minimum of 12 votes, if secured the support of both representatives of the national minorities.

Earlier, the specialized commission voted to eliminate the provisions of GEO 114/2018 regarding the regulation of gas and electricity prices, as well as the elimination of the 2% tax on the turnover applied to energy companies. The final decision will be taken in the plenary of the Chamber, which is the decision chamber.

If the final vote constrains the return to liberalization, the regulatory authority (ANRE) will have three months to draw up a plan to return to the initial situation. ANRE will have to revisit the calculations for the new regulatory period and take new measures to counterbalance previous decisions, including those for lowering certain tariffs.

Ion Lungu, president of the Romanian Electricity Suppliers Association – AFEER welcomed the idea of repealing regulated prices, but warned that there was a risk of a new period of chaos and uncertainty in the sector, at a time when prices are already rising. “It is very good that we return to a normal situation and we are glad that we want to give up those articles that bring the regulated prices back into the market. But it is very annoying for the market participants this game with the decisions. This leads to uncertainties in the market, chaos, distortions,” said Lungu, quoted by Agerpres.

He pointed out that nowhere in the European Union has there been a situation to return to regulated prices so abruptly and without consulting specialists, as it happened when GEO 114 was approved in December 2018.

“No matter what decision is made, it is necessary to allow a period for the world to prepare. I do not know how this comeback will be made. Let’s wait for the final vote, because the dice have not been thrown yet,” he said.

According to AFEER President, all of this takes place in a period of higher prices than usual. Thus, on the OPCOM energy exchange, the spot price for Wednesday has an average of 459 lei per MWh, compared to 307 lei on Monday and 405 lei on Tuesday. The maximum price reaches 580 lei per MWh during peak hours, very close to the historical high in winter of 2017.