Acasă » Electricity » GEO 114 amendments increase private players’ returns and subsidize coal

GEO 114 amendments increase private players’ returns and subsidize coal

27 March 2019
Electricity
Bogdan Tudorache

The Draft Emergency Ordinance to amend the Emergency Ordinance 114/2018 also introduces changes in an ANRE Order that was not affected by GEO 114. While the sale price of gas remains blocked at 68 lei/ MWh, transport and distribution operators receive an unexpected gift on both gas and electricity: the increase in the rate of return (RRR) from 5.66% to 6.9%, directly by law, and not by an ANRE order, as it has been established so far.

Earlier, many players in the market, like Electrica, sued ANRE for a sharp drop in RRR at 5.66% after companies had already made business plans on a higher expectation.

At the same time, the 2% additional tax rate remains in effect – obviously, it will translate, after calculating the increased yield, into the bills of some consumers – those that will not benefit from the capped price, or in all bills after the capping period.

Instead, coal and cogeneration installations receive a new exception to the law, i.e. subsidies, by removing the additional 2% tax, as announced yesterday by Energy Minister Anton Anton.

And the bankers achieved a victory, more precisely a 10-fold reduction in the asset tax, to 0.2% for small banks. It is true that large banks have a reduction of only 5 times, to 0.4%.

Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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