ACUE: The new regulations adopted by ANRE will lower the volume of investments for the modernization of networks

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The electricity distributors members of the Federation of Associations of Energy Utility Companies (ACUE) are deeply concerned about the negative impact on networks and consumers of the methodology to determine electricity distribution tariffs and the lower regulated rate of return applied to these tariffs, adopted by the Regulatory Authority for Energy (ANRE).

The regulatory provisions adopted by ANRE will lower the volume of investments and increase the gap between Romania and other EU countries, considers the Federation with 30 members, among which E.ON Romania, ENGIE Romania, ENEL Romania, CEZ Romania, Transelectrica, Electrica SA.

ACUE had requested ANRE “to delay their adoption for six months, to provide the necessary time for a real consultation and a correct analysis of the effect of the proposed indicators, in order to avoid significant risks raised by these regulations to the capacity of operators to undertake investments necessary for the modernization and development of networks and for improving distribution service quality”.

Members of ACUE consider that the effect of lowering distribution tariffs, as a result of the approved regulated rate of return of 5.66%, will be almost null for the final bill of household consumers. ACUE calculations show that a family with standard consumption of around 100 kWh/month will save less than 1 leu/month.

However, studies invoked by ACUE show that „the new regulations for electricity distribution could lead to a loss of contribution to GDP of RON 13.7 billion and the loss of approximately 4500 jobs in the economy, in the period 2019-2023, which will also lead to lower fiscal contributions paid annually to the state budget by RON 1.2 billion as fiscal revenues from profit taxes and social taxes and contributions”.

“A significant reduction in investments will have as final effect a lower quality of service, affecting the household consumers, the industrial consumers and the competitiveness of the Romanian economy. Lower investment levels would annul the effects towards improving service quality registered as a result of the approximately EUR 1.2 billion invested over 2014-2017 in electricity distribution networks, respectively lowering average interruption times from 700 minutes to 284 minutes per consumer per year. For this year, electricity distribution operators have ongoing investments totaling around EUR 400 million.”

Members of ACUE have a total number of 27,000 employees and annual turnover of over EUR 5.5 billion. The total value of investments by ACUE members over the period 2005-2017 exceeds EUR 10 billion. The impact of member companies’ activity in the economy is significant, indirectly supporting further tens of thousands of jobs.

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