RCS&RDS pushes forward towards obtaining power distribution licenses

Newsroom 26/10/2015 | 23:27

Telecom operator RCS&RDS intends to develop its own power distribution grids in two Romanian  regions, but the company’s demand for licenses was rejected by the Regulatory Authority for Energy (ANRE).

In an official statement sent to the media, RCS&RDS announced that it will continue the actions necessary to obtain the licenses.

Two companies in the RCS&RDS group currently have under way projects for the development of power distribution grids, which should lead to substantial price reductions  for consumers, the company stated in the press release. 

In September 2015, RCS&RDS demanded licenses for two pilot projects, one in Oradea city and the other in the vicinity of Timisoara city.

However, ANRE did not allow RCS&RDS to offer this service, for lack of agreement from the distribution operators that are currently offering the service in each of these areas, according to the RCS&RDS press release.

 ANRE’s position is that RCS&RDS could only develop its own power distribution grid only after it will connect its grid to the public grids that are used to take over or inject energy into the National Energetic System, according to Hotnews.ro. 

The ANRE says that according to EU regulations, in a certain area and for a limited timeframe, the state designates one single distribution company that has monopoly granted by the state via license and the cession contract, writes Hotnews.ro

In reply, RCS&RDS announced its two companies have started procedures to contest the ANRE decision, claiming that it breaks the law and it is unconstitutional.

“By grounding this decision on its own orders, issued in 2014 and 2015, ANRE said the release of the licenses required by the companies in the RCS&RDS group depends on obtaining the agreement from current distributors in those areas, who signed contracts for the concession of this service corresponding to networks built by the state. Neither at the moment of signing the contracts, nor at the current moment, was there any legal monopoly on the power distribution service,” says RCS&RDS in its press release.

Between 2014 and 2015, ANRE extended the exclusivity beyond the borders of the grid owned by the concessionaire, to an entire territory. The Authority thus has excluded the competition on this market, preventing other companies from providing power distribution service via grids financed from their own funds.

The two RCS&RDS companies have filed a complaint in which they required ANRE to revoke the documents that break the law and the constitution, but ANRE refused without giving any reasons, says the company in the press release.

RCS&RDS also says it is confident in the success of this project because:

  • The Constitution guarantees free access to an economic activity and the capitalist economy
  • The power distribution law stipulates that power distribution should take place via licenses, does not regulate any exclusivity in offering this service and does not set such an attribution for ANRE
  • The Competition Law forbids the actions of the public authorities which can affect the competition

“Only real competition on the distribution market can bring both direct as well as indirect benefits to consumers, transforming the power distributon service into a quality, competitive service based on new networks that are undergoing modernization. This is why this project of RCS&RDS represents an important step for the Romanian society,” states the company in the press release .

“We anticipate that if the barriers created by ANRE are lifted, price reductions for consumers will be substantial, because we will offer through our grids a distribution tariff of 120 RON/MWh, compared to tariffs between  RON 159.49 up to RON 188.2 RON/MWh asked by the concessionaire distributors,” stated the company. 

RCS&RDS also states: “A climate closed to evolution, that pertains to an ideology that Romania left behind in 1990, which is contrary to investments, new ideas and technologies, and generally to competition, cannot contribute to growing the wealth of the population and ensuring the energetic security of Romania, but will lead to the perpetuation and worsening of current flaws in the energetic system, claims RCS&RDS in the press release.

In picture: Valentin Popoviciu, business development manager of RCS&RDS

Otilia Haraga

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