The transition fund, from which energy suppliers were supposed to receive money for price cap schemes, has run out of money. The draft austerity decree requires the labor and energy ministries to pay the bills, but Virgil Popescu (the energy minister) said in the document that he did not have the money.

State Secretary of the Ministry of Finance Daniela Pescaru, said that from the beginning the policy warned about the transition fund, but it was not listened to.

Read also: EXCLUSIVE Problems with austerity decree: Virgil Popescu told Kechiu he has no money for energy schemes

The amounts from the Transition Fund are small / the Ministry of Energy will probably receive the money in August

“Energy price compensation is carried out through the Transitional Fund, which is replenished by the surcharges regulated by Decree 27. In practice, in recent months, we have found that the amounts collected in this fund are lower than the payment requirements demanded by energy suppliers” , Pescaru said during a meeting of the Economic and Social Council (CES).

• “We cannot change the budget until the first budget revision, which usually takes place in August. We do not have a budgetary mechanism to somehow increase funds for this Transitional Fund.”

“Then we introduced a resolution (there is no saving order in the project) so that the customers (Ministry of Labor and Energy) could also pay these amounts from the approved budget. Yes, these ministries can say they don’t have the necessary funds, but we will complete it when they fix it,” she said.

• In August we will be thinking about a solution to be able to increase the budgets to cover these bills.

The Ministry of Finance has read the remarks of the Ministry of Energy

Alina Verega, member of CES, drew attention to the fact that financial resources are not specified in the order as the amount of settlements with energy suppliers.

“In the opinion of the Ministry of Energy, it is written in black and white that there are no other resources in the budget of the Ministry and that it has to pay 1.3 billion lei,” she said.

For her part, Daniela Pescaru clarified that this decision is indeed a compromise.

“We have the opportunity to completely cancel this provision. So far, we have had no legal grounds to pay these amounts from the state budget. According to the order, they are paid from the Transitional Fund, where the funds were not collected,” said the State Secretary.

• “Without having legal grounds, we could not record the funds for these purposes in the budget of the ministries.”

“If the ministries show savings… and they may not. They can pay from those credits that they have even for other actions, but which are scheduled to be paid in the fourth quarter, so that we, correcting August, will be able to cover this hole created by the payment of these compensations,” Pescaru said.

She drew attention to the fact that the Ministry of Energy made a remark to them, although it is a co-initiator.

“We have no other solution before the fix,” she said.

The budgetary reserve fund… is also poor

“Any change in the budget, except for an increase in the budget from the Reserve Fund of the budget, which is used for new, emergency, unforeseen actions. These costs are neither new nor unforeseen. Anyway, we only have about 200 million in the reserve fund. He still couldn’t (not give money),” Pescaru said.

• “Little money has been collected (for the Transitional Fund – no). These surcharges are no longer paid and I don’t understand why, because the prices are quite high.”

Alina Verega explained to him that the prices on the market have dropped quite a lot, and producers can no longer pay the taxes provided by law, because they no longer belong to the same tax base.

“Electricity is released at a regulated release price for supply to the population and enterprises, and the tax is applied in a lower amount. Therefore, the fee is lower. This is a mechanism that worked up to a certain point. You need to find another solution. Our concern is related to the pressure we are putting on cash flows,” Wegera said.

Daniela Pescaru said that she was personally against the creation of this transition fund.

“I thought about it, but the decision was made… and unfortunately it didn’t help us.” concludes Pescara.

Concordia: A number of measures are not justified in the Resolution

“We notice that there are a number of measures that are not justified,” the Confederation of Employers Concordia said.

This defines a serious problem from the point of view of national energy security and sustainability.

“In its current form, the project could create serious problems in the field of energy supply, not covering the need for financing, with the risk of not being able to maintain payments in the supply chain.

supply, to production, transportation and distribution,” the organization says.

The draft does not specify the sources from which the state will now settle with energy suppliers.

“Currently, according to the financing scheme adopted by the Government in 2021, for the village of

of the sums paid by them in advance, the suppliers report the figures to ANRE, which after checking them

to be transferred to the Ministry of Energy, for non-domestic consumers, respectively, to the Ministry of Labor, for domestic ones,” the cited source notes.

The draft states that these two institutions, which pay suppliers in advance, can

make payments from other budget items.

The main problem is that these additional articles of the budget are not defined in the draft and they do not actually exist.

“None of the ministries have budget savings or excess lines in this regard,” says Concordia.

Concordia notes that the Ministry of Energy’s opinion on the project indicates that it does not have the financial resources to comply with the provisions of the Decree.

• At the moment, as also noted in the notice, the ministry has an outstanding debt to suppliers under the compensation scheme in the amount of 1,338,151 lei, given that in any case, energy suppliers register a payment delay of three to four months on average. , the latest NARE reporting at the level of December 2022.

“There is a high risk to the security of energy supply, given that the Government intends to take a number of measures that the Department of Energy says it cannot implement,” Concordia said.

• Advancing the GEO project in its current form without identifying realistic sources of funding to settle compensation schemes poses significant risks and could lead to gridlock in the energy sector. Viable solutions must be identified for adequate allocation/replenishment of the budget of the ministries that ensure the settlement of these payments.