The National Energy Regulatory Agency (ANRE) has approved electricity distribution tariffs for 2024, which have been increased by an average of 3.39%, the institution’s president, George Niculescu, said on Thursday. He noted that this increase is lower than the inflation rate estimated by the Forecast Commission at 4.6%. This decision does not appeal to distributors, who claim that the level of new tariffs is too low to cover costs.

ACUE says rates have not covered costs for the third year in a row

Thanks to the electricity distribution tariffs set for 2024 by the regulatory body, it is confirmed that in Romania the legislative framework does not support the large-scale investments in distribution networks necessary to facilitate the inevitable energy transition, the press reports. release of the Federation of Associations of Energy Companies (ACUE).

According to her, for the third year in a row, tariffs do not fully cover the costs of distributors. It is expected that the additional costs caused by the explosion of prices in the wholesale market from 2022 will be compensated by distributors within 5 years. The cost of capital required for investment is not covered by current regulations, and the methodology for setting tariffs is not adapted to the goals that our country has undertaken in the complex process of energy transition.

ACUE: 70% of the financial effort needed for the energy transition should go to distribution networks

The European Commission recently sent an action plan to member states to boost network investment, estimated at more than €500 billion over the next decade. According to estimates, about 70% of the financial effort required for the transition should go to distribution networks. The need for investment is huge for the transformation that networks must go through to meet climate goals, and the time to achieve them is very short, ACUE also notes.

The federation also says that distribution operators have already accessed in record time 1.1 billion euros from the Modernization Fund and asked the authorities to add free support that would ease the tariffs paid by consumers and facilitate significantly more investment. online, for their benefit. To co-finance these investments, distributors need sufficient income to support the implementation of projects, given that companies have not recovered financially since the crisis year of 2022, when they had access to significant loans to support current activities.

The negative impact of the results of the tariff setting process on the distribution in 2024 can be mitigated to the extent that in the first months of next year, NARE will provide a clear vision of the conditions for the fifth regulation period, which will begin in 2025, ACUE believes.

In this new decisive cycle of the sector’s development, distribution operators expect the abandonment of excessive regulation, greater openness to innovation and flexibility, the provision of financial resources for the necessary large-scale investment program, the stimulation of operational and economic efficiency, reflected in the improvement of services offered to customers in Romania.