The members of the Association of Energy Suppliers of Romania – AFEER express their concern that not even now, almost four months after the adoption of the legislation and the issuance of the first compensated bills, they have not received back the money spent on capping and offsetting electricity and gas prices. Moreover, the new Joint Order of the Ministers of Labor, Energy and Finance on the settlement of invoices unjustifiably extends the deadline for reimbursing the amounts spent by suppliers, to absolutely unbearable limits.

“We strongly point out that the risk of going into insolvency or even bankruptcy increases exponentially with the time when the state does not reimburse the expenses made by suppliers. Moreover, a possible financial deadlock in the middle of winter would be devastating for the security of the national energy system. With few exceptions, which account for no more than 0.1% of the energy market, companies have not received any money, although bills with capped prices and compensation due to consumers have been issued since November 2021. So far, subsidies through capping and compensation for energy prices, regulated by the authorities, was borne by suppliers’ money, including borrowed money. It is neither the role nor the expertise of companies to do social protection. This is the role of the state. In addition, the new Joint Order 183/112/173 of 2022 of the Ministers of Labor, Energy and Finance arbitrarily extends the term for settling invoices. According to the new Order, all suppliers must redo almost all the documentation for the settlement of expenses incurred with the capping and clearing of invoices. This involves a new operational effort and extends the deadline for reimbursement of suppliers’ expenses towards the end of the period of application of the consumer subsidy scheme, March 31, 2022. We are talking about hundreds of millions of euros that suppliers have spent, mostly based on bank loans, without receiving them back from the state. This situation cannot continue! And not because the suppliers don’t want it anymore, but because they can’t anymore”, says Laurențiu Urluescu, AFEER president.

In the context of explosive increases in electricity and gas prices, AFEER considers that support measures are needed – as it has considered since the beginning of the energy crisis – to support both domestic and non-domestic consumers; but all this without inducing unjustified losses to suppliers and affecting energy companies.

Suppliers are integrators of the energy market, the “link” between producers, the transporter, distributors and consumers. Invoices include the purchase price of electricity and natural gas, as well as transmission tariffs, distribution tariffs, taxes to the state (VAT and excise duties), along with contributions to support some producers (green certificates for renewable energy producers and the bonus of cogeneration for high-efficiency cogeneration producers). Suppliers have to pay full bills to all of them, as capping and clearing only applies to customers.

The financial efforts of the suppliers to fulfil their legal obligations, to continue to pay, on the whole energy chain, the whole bills to the producers, transporters, distributors and the state budget, without having the appropriate receipts from the final customers and state are huge! And if the suppliers do not pay the full bills to all of them, they pay increases and penalties for delay.

For example, according to the law, the budget should have been reimbursed for the value of the caps and compensation, money that not only did the suppliers not receive but, according to the new regulations, they will not receive it too soon. However, if the suppliers do not pay the VAT and excise duties related to the invoices for which they did not receive the money from the budget, the state charges them penalties for delays and non-payment!

Most providers have resorted to bank loans, and some have already reached their credit limit, which means they can no longer ask for money from the banks. In addition, loans come with additional costs for suppliers, such as interest and bank charges, which companies should pay from the supply margin. Unfortunately, although they have significant costs to support the delivery service (employees, customer service offices, paper, printing and mailing invoices, call centres, etc.), they are not recognized by the authorities in the price cap set. The margin, which should cover supply costs, is virtually zero, and in many cases even negative.

AFEER advocates and demands, once again, that the legislation be complete, simple, clear and for the benefit of the entire energy sector, from producer to consumer, so that the population and companies in Romania can get through this period of crisis as well as possible.

 

Short-term proposals from AFEER

• Increasing financial support for vulnerable customers. To simplify the implementation of the scheme, aid could be provided through town halls, based on a voucher.
• Granting financial aid from the state for all household consumers, in a fixed amount, directly in the invoice, for a set period (for example 50 lei/month). In this way, each consumer will be able to see directly on the invoice the existence and amount of the aid, and the verification by the authorities would be greatly simplified and, consequently, the deadline for reimbursement of expenses incurred by suppliers would be greatly reduced.
• The supplier that granted the financial aid may choose to offset the amounts he has to recover from the state with the payment obligations due to the budget.
• Reduction of the VAT rate applicable to electricity and natural gas supply services.
• Elimination of excise duty on electricity and natural gas.
• Covering from the state budget the value of the amounts related to the state aid schemes regarding the high-efficiency cogeneration bonus and the green certificates.

 

Long-term proposals from AFEER

• Adopt legislative measures to promote the construction of new production capacities.
• Implement measures to increase energy efficiency.
• Supervision by the competent authorities of the fulfilment of the intermediate stages for achieving the objectives of the NRRP regarding the energy system. We appreciate that there are already significant delays in the national regulatory framework, which should facilitate investors’ access to the various funds for the development of energy generation capacities and electricity networks, made available to Romania by EU regulations.
• Accelerate the decision regarding the exploitation of gas from the exclusive economic zone of Romania on the Black Sea.

 

About AFEER

The Romanian Association of Energy Suppliers, established in 2006, currently has 34 members, suppliers and traders licensed and active in the electricity and/or natural gas market, which ensure the supply of energy to both consumers and individuals. as well as to SMEs and consumers from all categories of economic agents operating in Romania, with a market share of about 90% of the final consumption of electricity and 65% of the final consumption of natural gas.