Merger of its subsidiaries might cost Romanian group Electrica EUR 128 mln

The merger of the three subsidiaries of Romanian state-controlled electricity distribution group Electrica might cost it RON 620 million (EUR 128 mln), Economica.net commented based on the interpretation of new regulations drafted by the energy market regulator ANRE.

Under the new regulations, the three merged regional distribution networks operated by Electrica must charge the lowest of the distribution fees currently charged by the three standalone companies. Moreover, the prices should remain constant over the whole regulatory period (2021-2023).

The possible financial losses incurred due to the flat distribution fee set under this procedure can be recovered, if demonstrated by the company, in the next regulatory period, Economica.net added.

ANRE has drafted the new regulations, but it has not enacted them yet.

The shareholders of major Romanian utility holding Electrica have already approved the merger of the group’s electricity distribution subsidiaries. Thus, the three power distribution companies in Electrica group (SDEE Transilvania Nord, SDEE Transilvania Sud, SDEE Muntenia Nord) will merge into a single entity that will be named Distributie Energie Electrica Romania (DEER). The merger will become effective as of January 1, 2021.

(Photo source: the company)