Government approves new electricity bill that brings in deregulated prices and an independent energy regulator

Newsroom 16/03/2012 | 17:21

The Romanian Government has approved today a new electricity law that has been delayed for one year and was demanded by the European Commission (EC) and the IMF. The law, which brings deregulated prices in the electricity market, has been sent for approval to the parliament. Thus, the country should avoid an infringement measure from the EC.

Lucian Bode, minister of Economy, said today that two ministries could separately control the operations of the transportation system and the producers and suppliers of electricity. The new law transposes a European directive which makes the system operator independent from the owner, which is the state.

According to Bode, Transelectrica (grid operator) and Transgaz (natural gas transporter) would move from the Ministry of Economy to other ministries in the shortest time possible.

A new commission that sets up disputes will be set up for players in the electricity market as an independent body that will function within the energy regulator ANRE.

The new piece of legislation ensures better protection for consumers while electricity providers can be fined up to 10 percent of the turnover for abusive practices.

The law defines the vulnerable consumer and streamlines procedures for clients that what to change electricity suppliers. This procedure would be made within 3 weeks.

Romanian’s energy regulation agency ANRE will become an independent body that presents annual reports to central institutions (government, parliament and presidency), and the European Commission. Its budget will be approved by the parliament.

The Government will make proposals for the president and vice-president of ANRE, while a specialized parliamentary commission will evaluate the candidates. In the end, the presidency makes the appointments. Members of the regulatory committee will go through the same process.

“These measures offer ANRE the power to make independent decisions that guarantee the competition on the electricity market, and impose sanctions that impact companies which break the rules,” said Iulius Plaveti, president of ANRE.

Electricity prices for companies will be deregulated by end-2013, while household consumers will pay higher prices by end-2017, according to the law.

Under the new piece of legislation, electricity distributors will have to develop the electricity networks in localities, something that is absent in the current law. Local authorities will be able to develop the network in partnership with electricity distributors.

Ovidiu Posirca

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