Talks on Energy Prices

The Romanian authorities and the European Commission officials are having talks on energy prices in Brussels

Ştefan Stoica, 22.05.2019, 13:55

The Romanian authorities from the
field of energy regulation have held talks with European Commission officials
in Brussels. This round of talks comes after in March, this EU body sanctioned
Romania for having violated legislation in the field of gas distribution. How
was this situation possible?

Zoltan Nagy, Vice-president of the
Romanian Energy Regulatory Authority, ANRE, said during a conference on energy,
that when the energy market was liberalized in 2017, the mechanisms in place
weren’t mature enough so the Romanian gas market wasn’t completely ready for liberalization.

This was the reason for which in
December 2018, the Romanian government made the decision to cap the price for domestic
energy production for a while. According to the ANRE official, all surveys
conducted at that time showed that there was no point for Bucharest to continue
the timetable agreed upon with the European Commission because we would have
faced a weird situation in which the imported gas had become cheaper than the
timetable prices. However, gas price doubled over a period of one year and a
half and because the European Commission does not agree with the idea of
protecting household consumption, an infringement procedure was initiated
against Romania in March, as the country was infringing upon the European
legislation in the field. Zoltan Nagy has admitted there are incompatibilities
between the natural gas directive and the EU treaty.

Zoltan Nagy: There is a
legal framework for temporary measures at the level of member countries, which
are aimed at protecting certain categories of consumers. The fact that in our
country this protection is granted to all household consumers might not be
entirely right, but our talks with the European Commission have reached a
certain level and after renouncing these temporary measures, we could have a
genuinely-liberalized market.

The ANRE Vice-president has also
added that measures must be taken in order to protect the vulnerable consumers
from fluctuations in gas or electricity prices. Most household consumers do not
need protection at this time and those really vulnerable aren’t protected
enough, Zoltan Nagy has also explained. According to him transaction mechanisms
on the wholesale market are also important and ANRE is working on these issues right
now.

As for the 2% contribution from the
energy producers’ turnover, which will go directly into the institution’s
budget, ANRE proposed amendments to its own functioning regulations so that
after the regulator has covered all its administrative expenses, the surplus
will be used in energy-efficiency projects all the more so as Romania is also
under infringement in terms of the rehabilitation of the collective residential
buildings.

(translated by bill)