No More Regulated Energy Prices For Legal Entities

The European Commission in June initiated an infringement procedure against Romania in several cases concerning the domestic market for gas and electricity. The Commission objects to the fact that Romania"s National Energy Regulatory Authority (ANRE) still regulates prices for non-household consumers (institutions and businesses).

"The start of the infringement procedure could lead to an obligation to limit ANRE"s regulatory scope to household consumers only. This will mean that the market will have greater openness," explained Alexandru Sandulescu, Director of Energy Policies with Romania"s Ministry of Economy.

In other words, many businesses that have not yet exercised the right to change their electricity supplier will "wake up" on the free market, not necessarily without electricity, but with different prices to choose from. "The businesses that will have to act as consumers on a free market are not necessarily in a terrible situation and it does not mean that they will be left without electricity. Practically, the terms of the supply contract will change. Companies and institutions are now able to easily negotiate a very good price for the electricity. The competition is harsh and the price of electricity has decreased substantially on the free market. Everyone stands to win if they change their supplier these days," Ion Lungu, President of the Association of Electric Energy Suppliers In Romania (AFEER) recently said in an interview to BURSA.

According to him, the competition-based market now offers ideal conditions to increase the real degree of deregulation, which became "stuck" at 55% at the end of 2008. The crisis in 2009 has brought more consumers to the free market seeking cost cuts through better electricity prices.

Following the announcement that an infringement procedure had been initiated, ANRE President Petru Lificiu said: "I believe that the procedure has been initiated because we did not inform the Commission in time of the development of the market and the specificity of our captive consumers. Within two months, ANRE will inform the European Commission of the reasons why Romania has maintained regulated prices for certain non-household consumers." He stressed that the warning issued by the European Commission, to Romania and 24 other Member States, concerned the breach of regulations on information.