First pageNewsFurther amendments to the measures adopted in the context of the energy crises  

Further amendments to the measures adopted in the context of the energy crises  

On 22nd March 2022, Romania’s State adopted a set of measures aimed at protecting the final consumer against the steep rise of energy prices implemented by means of the Government Emergency Ordinance no. 27/2022 (on the measures applicable to final consumers on the electricity and natural gas markets between 1 April 2022 – 31 March 2023, and amendment of certain laws in the energy field (the "GEO 27/2022")).

In a nutshell GEO 27/2022 established: (i) a maximum regulated price for electricity and natural gas supplied to final consumers and (ii) Romania’s state obligation to compensate the suppliers for the losses incurred further to applying the maximum price.

Since its adoption, GEO 27/2022 has suffered 6 amendments, the last of which being passed by the Romanian Parliament on November 23rd (the "Approval Law") through a law approving the Emergency Ordinance no. 119/2022 on the amendment and supplement of GEO 27/2022 (the "GEO 119/2022").

To detail the summary of this article further, the contents include: (i) the most recent changes adopted through the Government Emergency Ordinance no. 153/2022 published in the Official Gazette on 11 November 2022 (the "GEO 153/2022") and (ii) the amendments contained in the Approval Law.  

Note should be made that the Approval Law will be soon sent for promulgation to the Romania’s President, which can request the Parliament to re-examinate the Approval Law or the Constitutional Court to carry out a constitutionality check, and will enter into force within 3 days as of publication in the Official Gazette of Romania.

RELEVANT PROVISIONS

1. Duty to sell electricity on the centralized markets administered by OPCOM as of 1st January 2023

  • Shortly after the Romanian State gave green light to producers to conclude directly negotiated bilateral electricity agreements, Romanian State introduced the requirement for the electricity quantities necessary for the internal consumption to be traded by producers via the centralized market;
  • This duty to trade via the centralized market was imposed further to the centralized electricity acquisition mechanism requiring producers to sell their electricity to suppliers of end customers against a price equal to RON 450/MWh. All sales will be brokered by the Romanian gas and electricity operator OPCOM, who will act as a buyer in relation to the producers and as seller towards suppliers;
  • The centralized acquisition mechanism is applicable to the following participants only (ruling out any other category of participants):
    • Electricity producers with a total installed production capacity higher or equal to 10 MW, other than those operating (i) generation capacities from renewable sources based on the technologies and installed capacity listed in Law 220/2008, (ii) generation capacities commissioned after 1st April 2022 and (iii) capacities for the production of combined heat and power that deliver heat to SACET;
    • Electricity suppliers who have signed agreements with final costumers, electricity transmission system operator (OTS) and electricity distribution operators (DO) when purchasing electricity for their own technological consumption;
  • Quantities already contracted before the entry into force of GEO 153/2022 seem to be deducted from the obligation to sell under the mechanism for the centralized acquisition of electricity;
  • Any quantities in excess of the internal consumption can be traded freely by the producers;  
  • Failure by producers to sell such quantities under the centralized acquisition mechanism, as well as failure by the producers, suppliers, OD or OTS to send the production and consumption forecasts and substantiating documents can be sanctioned by a fine ranging between 1% to 5% of the annual turnover of the relevant market participant;

2. Changes to the solidarity contribution included in the Approval Law

Background: GEO 27/2022, in its initial form, contained an 80% windfall tax for the electricity producers which was repealed by GEO 119/2022 and replaced by the solidarity contribution to be paid by a broader category of participants. For details regarding the solidarity contribution please see our September Newsletter.

  • The extremely burdensome formula applicable for electricity exports and deliveries to other EU countries was repealed – hence, the electricity exports and electricity deliveries to other EU countries will now fall under the formula from annex 6.1 to GEO 27/2022 (as amended) which recognises a 2% profit margin;
  • The solidarity contribution due by the suppliers and trader will no longer be owed for the electricity and gas quantities sold in Romania but originating from import and/or from the intra-community space, as long as such quantities are traded for the first time on the Romanian market;
  • Producers’ contractual partners from the hedging agreements will also have the obligation to pay the solidarity contribution – this is regulated as a retention tax that will be retained by the producers from the price due to the hedging provider;
  • Generation capacities commissioned between April 1st , 2022 –August 31st, 2022 will be exempted from the solidarity contribution (before this amendment the exemption was applicable only to capacities commissioned after September 1st,  2022);

3. Capped prices for consumers introduced by the Approval Law

Background: GEO 27/2022 in its initial form contained capped electricity and natural gas prices for each and every category of consumer. However, GEO 119/2022 unexpectedly repealed in total or in part the capped electricity prices for certain categories of consumers.

  • All electricity consumers will benefit of a capped price ranging between RON 1/MWh - RON 1.3/MWh;
  • As of January 1st, 2023, the capped price of RON 0.37/MWh for the supply of gas will also be applicable to the consumers which are part of an industrial park or of a closed distribution system;
  • The duration of the price caps for both electricity and gas was extended until March 31st , 2025 (as compared to August 31st, 2023, as initially provided by GEO 119/2022);
  • Household clients with several consumption places will benefit of the capped prices only for one consumption place; 

4. Deadline for the payment of the compensations due to the suppliers  

Background: Romania’s state undertook to compensate (subject to certain limitations) the suppliers for the losses incurred further to applying the maximum price. However, up to date, the related payments were repeatedly delayed by the competent Ministries.

  • As per the Approval law, the compensation due to the suppliers will be paid by the relevant ministries as follows:
  • 40% of the amount requested by the suppliers within 10 days as of the submission of the compensation request;
  • Balance within 10 days as of the ANRE’s calculation of the compensation amount.

5. Gas producers’ obligation to cover the internal consumption was amended by the Approval law  

  • The obligation of the gas producers to sell the quantities from the current internal production necessary for the consumption of household consumers and heat producers’ only for the gas quantity used for the production of heat for population  against a fixed price will be extended until 31 March 2025 (as compared to  August 31st, 2023 as provided by GEO 27/2022);
  • The gas producers will be obliged to also sell the quantities covering 75% of the own technological consumption of the transmission and system operator and of the distribution operators against a price of RON 150/MWh.

6. Aid to Republic of Moldova included in the Approval law  

  • In exceptional situations caused by the war in Ukraine affecting the safety of the electricity supply in the Republic of Moldova, the electricity producers will have the obligation to sell the electricity quantities which remain available after fulfilling the obligations under the centralized acquisition mechanism (item 1 herein) to electricity traders/suppliers designated by the Government of the Republic of Moldova for this purpose against a price equal to RON 450/MWh;

For any further details regarding the above, please contact Raluca Gabor, Managing Associate in the Energy team at RGabor@saa.ro.

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