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Profit capped at 5% for electricity produced for households in portfolios of the suppliers of last resort

1 February 2019
Electricity
energynomics

The National Regulatory Authority for Energy – ANRE approved Order no. 10/2019 on Pricing methodology for electricity sold by producers under regulated contracts and on the amounts of electricity from regulated contracts concluded by producers with suppliers of last resort. The order is not yet posted on the ANRE website, but the main provisions are listed in a press release issued by the Authority. The measures mainly hit the big “cheap” electricity producers – Nuclearelectrica and Hidroelectrica and are expected to contribute to rising power prices in competitive markets. At the same time, it is likely to contribute to the migration of households which have opted for the free market back into the regulated market, which will impact on the business of the suppliers who have moved best to attract customers in the liberalized market; this will also introduce a high degree of uncertainty about the behavior of these customers, thus making it more difficult the forecast of consumption and the commercial activity for the power suppliers.

The methodology establishes

  • how will be determined the quantities of electricity to establish sales obligations under regulated contracts for producers
  • how will be determined the justified costs of regulated revenues and prices for producers with dispatchable units other than co-generating producers benefiting from the bonus scheme
  • the regulated price for high efficiency cogeneration producers benefiting from the bonus support scheme
  • setting a regulated profit of 5% of the costs considered justified in the electricity production activity
  • the manner and timing of the transmission of data and information between the entities to which the methodology applies
  • the definition of contractual periods, namely 1 March 2019-31 December 2019, 1 January 2020- 31 December 2020 and 1 January 2021-28 February 2022
  • the definition of the transitional rules applicable between 1 March 2019 and 31 December 2019

ANRE states in a press release that the Methodology is part of the package of regulations applicable between 1 March 2019 and 28 February 2022, in order to apply the provisions of Art. 61 of GEO 114/2018.

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