NEXT YEAR, "CEZ Distribuţie" will invest 200 million lei in the modernization of its grid

"CEZ Distribuţie" plans to invest approximately 200 million lei next year (approximately 46.5 million Euros) in its electricity grid. Doina Vornicu, the general manager of "CEZ Distribuţie", said: "This year, we have scheduled investments of 196 million lei, up 50% over last year"s amount. While in the past years we have invested in various types of equipment for improving performance, in the future we will focus even more on investments in the grids, in particular in the high voltage ones".

She said that in the five years since it acquired distribution company Electrica Oltenia, CEZ has successfully upgraded almost a quarter of the networks it is administering and about a third of the power stations. "CEZ Distribuţie" has decided to accelerate the investments in the high tension networks and in power stations to ensure the supply and to increase the quality of service by reducing disruptions.

The company will also continue to introduce stations which use the SCADA system (remote monitoring and management). Doina Vornicu said: "We have introduced this system in 30 plants and we plan to introduce it in 15 more plants this year. We plan to upgrade another 16 plants next year and introduce them in the SCADA system. The biggest project will be the Craiova Centru station, which will involve an investment of approximately 24 million lei".

• Early talks about the tax for unused capacity

The company is happy with the distribution fee set annually by the ANRE (market regulator). The fee covers all the investments of "CEZ Distribuţie" commissioned annually. Doina Vornicu has said: "There is room for improvement in the methodology for setting the tariff. For instance, we have begun talking to the regulator and the players in the distribution market with the goal of levying a penalty fee for the consumers that reserve a certain grid capacity and then don"t use it".

She has explained that there are many areas where the grids operate below capacity (consumers use less energy than estimated). Thus, in those areas, operators can not connect more users. This in turn means that operators are forced to make new investments in the network and transformer stations.

The head of CEZ Distribuţie added: "Operators are required to keep the capacity reserves requested by the consumer, even though it is not fully used. If the legislation gets amended, we can levy a tax for those consumers that only use 30-50% of the requested reserve. This would force them to estimate their consumption in a fair manner".

• Troubles with insolvent customers

Utility providers have very low odds of recovering their claims on companies that have entered insolvency. Doina Vornicu said: "Utilities are on the list of unsecured creditors, so the chances of getting any money back are very slim. This is why we have a program which involves talking to and negotiating with consumers that are in trouble, including households. They can reschedule their payments or make partial payments. Such talks yielded very good results so far and we have successfully collected some of our receivables. We don"t want to have customers with debts older than a few months".

This year, "CEZ Distribuţie" won 12,500 new customers (small and medium companies and households). This figure is below the forecast made in the beginning of the year, but bigger than the company expected.

Mrs. Vornicu said that the crisis caused industrial users in the Oltenia area to consume 25% less energy than in 2007-2008. Also, the number of unpaid bills has increased, both for companies and residential customers, but also in the case of public institutions. These types of customers have trouble paying their bills, or do so irregularly.