According to the answers sent by the institution to some queries of HotNews.ro, the National Energy Regulatory Authority (ANRE) exercises full control over 6 large electricity suppliers, 3 main large gas suppliers, as well as traders. ANRE observed that some suppliers reported high values ​​in end-user contracts and energy volumes were consistently sold in order to increase the price. Companies face a fine of 5% of turnover.

We will remind you that HotNews.ro wrote a series of articles about the rise in gas and electricity prices, while in European markets they are falling, and about how the state subsidizes the huge profits of suppliers.

And Prime Minister Marcel Ciolacu reacted on Friday, asking both the minister and the National Energy Regulatory Authority (ANRE) to investigate Romanian suppliers who are raising prices in Romania while they are being lowered in Europe.

End consumers, both household and industrial, were not directly affected by the price increase. But they suffer indirectly, because the state has suffered losses due to the application of the maximum compensation scheme. The state is obliged to bear the price difference, and in some cases there are suspicions that suppliers and traders did not comply with the law. So far, the state has paid more than 22 billion lei to suppliers. And many more billions to come.

ANRE noted “high values ​​reported by some suppliers”

The controls concern how the provisions of GEO 27/2022 regarding the maximum compensation scheme for electricity and gas prices have been complied with,

In the course of carrying out a specific activity on the monitoring of the electricity market, NARE found for the months of the first half of 2023 high values, which some suppliers reported as average prices from supply contracts concluded with end consumers, ANRE’s response to HotNews.ro stated.

Thus, “ANRE has started control activities at 6 large electricity suppliers, aimed at checking compliance with the provisions of GEO No. 27/2022 regarding the application of the price limit for non-household final consumers, as well as the application of the price limit in standard offers addressed to final consumers supplied in competitive regime, universal service regime and in the last resort”.

In the field of natural gas, NARE has started control activities at three main suppliers. Control measures are aimed at checking compliance with the provisions of Art. 2 para. (4) from GEO No. 27/2022 regarding the final price quoted by the suppliers.

In accordance with the provisions of Art. 2 para. (4) from GEO No. 27/2022, the final price billed by each electricity/natural gas supplier is the minimum price between:

a) the maximum final price provided for in Art. 1 paragraph (1) and/or (2);

b) contractual price;

c) the final price, calculated in accordance with the provisions of Art. 5 and 6.

Consecutive sale of electricity quantity to increase the price / Companies risk a fine of 5% of the turnover

With regard to the control activities carried out by NARE, in the field of electric power, control actions have been initiated against some suppliers and traders to check compliance with the prohibition provided for in Art. 16 para. (7^4) from GEO no. 27/2022, there are signs of successive sales of certain volumes of electricity with the clear aim of increasing the price.

Consecutive sale of a certain amount of electricity or natural gas by traders and/or suppliers engaged in trading activities, with the explicit purpose of increasing the price, is sanctioned by NARE, with a fine of 5% of the turnover, specified in Art. . 16 para. (7^4) from GEO no. 27/2022.

“The specified control actions are ongoing, and we cannot make public the preliminary or partial aspects. After the control actions are completed, the conclusions, as well as possible applied sanctions and assigned measures, will be made public,” NARE said.

Some explanations of NARE are related to current legislation

Eurostat recently revealed that contract prices in Romania are among the highest in Europe. Statistics on average electricity and natural gas prices for residential and non-residential final consumers in installments of consumption for the first half of 2023, presented in EUROSTAT format, are contractual, as they were reported by suppliers active in the retail electricity and natural gas market in the first half of 2023 year, ANRE reported at the request of HotNews.ro.

However, end users pay a capped price that is significantly lower than the contract price. The scheme is valid until March 31, 2023 according to GEO 27/2022. But here there are problems that the difference is subsidized by the state, that is, ultimately, by consumers.

• Between January 1, 2023 and March 31, 2025, prices in standard offers applicable to new end-users or those renewing their supply contracts may not exceed the value of the final ceiling prices shown on invoices relating to the category customers for whom they belong. Added to this are the provisions of the current regulatory legal framework regarding the universal service and the “last hope” service, which should gradually lead to the equalization of the contractual prices stipulated in the contracts for the supply of electricity and natural gas, with the limitation of the final invoice prices for different categories of customers.
• The benefits that may arise from the application of high contract prices for the sale of electricity/natural gas to final consumers are theoretical, provided that during the period of application of GEO no. 27/2022, as further amended and supplemented, the prices that consumers pay through electricity or natural gas bills are final prices limited to the categories of household/non-household consumers (according to part (1) and (2) of Article 1).
• At the same time, the amounts paid from the state budget for suppliers of electricity are determined by comparing the weighted average purchase price of the supplier with the marginal component of the purchase of electricity of the final estimated price for each category of end consumers.
• In accordance with the legal provisions, the maximum value of the weighted average purchase price, at which ANRE calculates the amounts to be paid from the state budget to electricity suppliers, was 1300 lei/MWh for the first 6 months of 2023, the level decreases to a maximum value of 900 lei/ MWh once Law No. 206/2023, published in the Official Gazette No. 634/11.07.2023.
• In accordance with the provisions of Art. 1 paragraph (1) and (2) of GEO 27/2022 regarding the measures applied to end consumers in the electricity and natural gas market in the period from April 1, 2022 to March 31, 2023, as well as for the amendment and addition of some regulatory acts in in the field of energy, approved with amendments and additions by Law No. 206/2022, with further amendments and additions (OG No. 27/2022), the final price charged by suppliers of electricity and natural gas to end consumers was limited

Regarding the amounts paid from the state budget to electricity and natural gas suppliers, Article 7^1 GEO 27/2022 provides the following:

“Starting from September 1, 2022, the final value as the product between the amount of electricity supplied to final consumers, beneficiaries of the support scheme established by this emergency decree, in each month of the period of application of the provisions of this emergency decree and the positive difference between the average purchase price determined in accordance with the provisions paragraph (2) of Article 3, the value of which is lower than or at most equal to the value established in Article VI of the Emergency Government Decree No. 119/2022, or as the Case may be determined in accordance with the provisions of paragraph (3) of Article 3, and the value of the procurement component, determined in accordance with the provisions of Clause (1) of Article 3, which refers to the month for which the bill is issued, will be compensated to suppliers from the state budget, through the budget of the Ministry of Labor and Social Solidarity, for household consumers, and through the budget of the Ministry of Energy, for non-household consumers, respectively to the values ​​calculated by the National Energy Regulatory Authority. “

Also, in accordance with the provisions of Art. 4 GEO 27/2022, the electricity supply component is 73 lei/MWh, and the natural gas supply component is 12 lei/MWh. Thus, the two components have fixed values ​​in primary legislation.

Brief history of high prices

Suppliers, especially through trading activities, have made huge profits in 2022, the state has poured many billions of lei into them, there is no price signal in the market, the next years are surrounded by complete uncertainty, and consumers do not benefit from the lowest prices, as for example in Hungary and Bulgaria. Vice versa. As far as contract prices are concerned, Romania is one of the highest in the EU, and with limited ones – somewhere in the middle of the ranking.

So far, the state has paid out 22.4 billion lei to suppliers, and by 2025 there will be many more billions.

The current cap level in Romania was set on GEO 27/2022, when electricity and natural gas prices were very high. At the same time, prices on European markets fell sharply – three times for electricity and 90% for gas. In Romania, it is unclear how justified the current restrictions are in Romania, and it is difficult to analyze this aspect in the absence of a free market and price signals.

In Romania, the price of gas is not free, the restriction starts with the producers. They are obliged to sell at a price of 150 lei/MWh. This is the purchase price, plus shipping, distribution and supplier markups. For the final household consumer, the price is limited to 0.31 lei/kWh, which means 310 lei/MWh, and for non-household consumers – 0.37 lei/kWh (370 lei/MWh), for the annual consumption of no more than 50,000 MWh.

Other articles on high gas and electricity prices:

• Why energy prices on the spot market in Romania are higher than in the West / Explained by suppliers
• Winter began with low gas prices on European markets / In Romania, prices are blocked by ceilings
• The response of the Ministry of Energy is full of contradictions, with which it protects the huge profits of energy suppliers: Companies complain that they did not receive subsidies worth billions of lei from the state on time
• Who are the businessmen and companies that benefited from the energy crisis in Romania / The supplier had a turnover of 18,346% and a profit of 3,298%
• What are the reasons why Romania has one of the highest electricity and gas prices in the EU / Explanation of the Ministry of Energy: Not only in Romania, companies have taken advantage
• Energy ceilings hide unreasonably high prices in the producer-supplier chain / What is checked on the market