The State, pending settlement of amounts to energy suppliers

The state has stopped paying the settlement of the costs borne by the energy suppliers for the invoices issued for the month of February 2023, the representatives of the Romanian Electricity Suppliers Association (AFEER) stated yesterday, during an informal meeting with the media representatives.

Laurenţiu Urluescu, the president of AFEER, stated: "Regarding the settlement of the amounts, most of the amounts requested for February 2023 have been settled. For March, no amount has yet been settled, but we have found that there are still small amounts to be settled for invoices issued in November 2022. (...) From our calculations, the outstanding amounts for settlement amount to between 1.4 billion lei and 1 .7 billion lei. We made an estimate of what the financial costs caused by this delay mean for us, costs generated by the loans that the companies made to the banks to cover the liquidity, cash-flow gaps. These financial costs so far amount to approximately 60 million lei and represent interest and bank fees, which means an additional cost of almost 17 lei/MWh delivered. Apart from these costs, we have another problem with the banks generated by the existence of the settlement ceiling, a ceiling that puts us in a disadvantageous position in the relationship with the bank regarding the settlement of amounts. The mere existence of a settlement price ceiling of 900 lei/MWh increases the risk profile of suppliers compared to banks, which means higher financial costs. Also, the ordinance that limited the sources of settlement to the amounts available in the Energy Transition Fund (ed. - GEO 90/2023) further weakens our position in negotiations with the banks. That means higher borrowing costs and lower amounts available as credit. The problem arises because the Energy Transition Fund is fueled by overtaxing producers and traders. However, at this moment, due to the 98% surcharge, trading activity in the energy field is suspended in our country, it doesn't really exist anymore, and the amounts that reach the respective trading fund are from the contracts concluded a few years ago. We hope that GEO 90/2023 will be amended in the Chamber of Deputies, which is the decision-making body, so that the settlement will be made by the state within a reasonable period and not depending on the available availability in the Energy Transition Fund. Especially since the amounts with which this fund is supplied have been considerably reduced. Thus, if last year the fund was fed with 1 billion lei per month, in 2023 it will be fed with a maximum of 600 million lei per month from producers, and from traders with almost zero lei per month compared to the 400 million lei per month in year 2022. For producers, receipts decreased due to the introduction of the centralized purchase mechanism at a fixed price of 450 lei/MWh. Traders, with 98% overtaxation on the margin, don't really trade anymore".

In practice, it is a delay of six months, in the context in which the National Energy Regulatory Authority (ANRE) verified the settlement requests of suppliers submitted until August 31, 2023. Related to the settlement of the amounts resulting from the compensation-ceiling procedure of prices for consumers, energy suppliers claim that, if they had used the 46 billion lei collected last year from energy to settle these amounts and not just the 22 billion lei paid, that money would have been enough to settle all invoices issued until March 31 2025, when the application of the emergency ordinance on energy price capping and compensation expires and market liberalization in this area should return.

We note that in the first 9 months of 2023, the Ministry of Energy paid compensation for suppliers, for the consumption of non-domestic customers, of 5.619 billion lei, of which 2.462 billion lei in September alone. The National Agency for Payments and Social Inspection within the Ministry of Labor paid suppliers, in the first 7 months of the current year, compensations of the same nature for the consumption of household customers of 2.3 billion lei. The Minister of Energy, Sebastian Burduja, declared in the first part of last month that, at that time, the unpaid debt of the ministry to suppliers amounted to 1.4 billion lei.

AFEER representatives also accused the unclear legislation regarding the applicability of the minimum tax of 1% on turnover for companies whose annual turnover exceeds 50 million euros. The energy suppliers claim that it is not very clear if they are exempt from paying this tax, due to the term "exclusive" used in the text of the law, regarding the activity carried out by the respective companies.

The President of AFEER said: "Some suppliers are also producers, and in the future some suppliers will also resume their activity of trading. The problem is the term "exclusive", because I don't think there are any companies in Romania that have declared a single CAEN code".

Regarding the energy that will be consumed next year, suppliers claim that there is uncertainty at the moment and that so far only 1.5 Terawatts of the required consumption for the year 2024 have been traded.

AFEER representatives also referred to the tripartite factoring agreements promised by the Ministry of Energy to improve suppliers' liquidity, in the context of delays in compensation payments, Suppliers claim that nothing was done because the state refused to legally guarantee that it would pay them the money due at the end of the 150-day grace period. In this way, in case of delay, the banks would have to take legal action against the supply companies. Therefore, they believe that this whole state of affairs will create additional costs that will ultimately be reflected in the bills issued to consumers by the energy companies.

The obligation to use the e-Invoice from January 1, 2024 in the business to business (B2B) relationship also creates problems for suppliers, who have to follow both the rules established by ANRE and those of ANAF.

Laurentiu Urluescu specified: "We will have to take a risk to see where the probability of being fined is lower: from ANAF or from ANRE. Because, if you issue the invoice as ANRE requires, you risk being fined by ANAF, and if you issue it as ANAF wants, you risk being sanctioned by ANRE. We will probably issue the invoice according to the anaf requirements and send it separately to the customers, but with the risk of sanctioning by ANRE. We haven't made a decision on this yet."

Moreover, B2B invoices will no longer be sent by post and suppliers will no longer be able to issue invoices for prosumers of legal entities, the latter being obliged to issue their invoices in the platform made available by ANAF.