Standards of performance for energy delivery and distribution

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In April, we will approve the standards of performance for power and natural gas supply, Zoltan Nagy-Bege, Vice-President of the Romanian Energy Regulatory Authority – ANRE, announced at EnergynomicsTalks. “I don’t know how realistic the two deadlines are [the one on the submission of tenders and the one on the conclusion of contracts, e.n.]In fact, of the companies we checked, only CEZ Furnizare and Tinmar managed to comply”, said the ANRE official. He specified that the checks were carried out randomly, “because it is impossible to check tens of thousands of documents”.

ANRE recently fined 5 large supply companies for non-compliance with regulations in the context of market liberalization. Two conditions have not been met by any of the companies: The failure to comply with the 15-working-days deadline for submitting bids concerning the conditions for the power supply on the competitive market, and, respectively, the failure to comply with the 5-day deadline for the conclusion of power supply contracts.

The vice-president of ANRE also referred to the IT platform the Authority is working on in a project with European funding. It will not be a trading platform, said Zoltan Nagy-Bege. “It will be a database with absolutely all electricity and natural gas customers in Romania, households and non-households, through which all supply contracts and all distribution contracts will be managed. The deadline for entry into service is June 2021.”

In parallel, the Authority will prepare legislation to oblige suppliers and distributors to use this platform. “This is the only way we can meet the deadline imposed by the Directive EU 944, which requires that no later than 2026, the change of supplier, the technical part, should take place within 24 hours at the latest.”

The electricity market is a high barriers market, where new players find it difficult to enter; it also entails high financial efforts and risks. “The number of authorized suppliers has not increased, nor has the number of requests for license increased. I think there are already enough suppliers that have also attacked the domestic sector so that there is healthy competition”, said ANRE Vice-President.

No company can respond to all 8,9 million customers. “I am convinced that the offers that appear first in the ANRE online comparator, those with the most attractive prices, are based on a limited amount of purchased energy. One company or another may not be able to support the same offer for 100.000 customers, but only for 10.000 customers, for example, as much as it can support financially and administratively.”

Price differentiation is the easiest way, he said. “How can you offer a lower price? One way to reduce costs is to do away with sending invoices by mail. The cost of an invoice printed and sent is at least 4-5 lei. At a monthly bill of 60-70 lei, it can mean 7-8% of the invoice value, that is significantly more the typical supply margins”, explained Zoltan Nagy-Bege.

To differentiate themselves, but also because they will not be able to survive otherwise, companies will continue to invest in their own IT platforms. “At this level, when talking about companies with millions of customers, the relationship with customers can no longer be kept by phone, handwritten, or in an Excel table. Call-centers, petitions, complaints – all these will be digitalized – we have already seen companies that have done so,” Zoltan Nagy-Bege said.

EnergynomicsTalks is an editorial product launched by the Energynomics communication platform aiming at encouraging a constant professional dialogue in the Romanian energy community during the state of emergency and amid the restrictions imposed by social distancing approach.

 

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