Major Romanian power trader seeks to get rid of subsidised industrial customers

Tinmar Energy, one of the largest suppliers of electricity and gas in Romania, notified part of its non-residential customers, subject to the “cap and subsidy” scheme enforced by the Government, about its intention to terminate their bilateral contracts starting mid-September. Under these circumstances, the said customers must rely on the supplier of last resort.

No household was notified, and the company intends to purchase electricity and natural gas from the market in order to supply residential customers within the limits of its financial resources, Tinmar explained in a statement quoted by Economica.net.

The problem was visibly generated by the latest amendments to the “cap and subsidy” scheme, which create financial risks for the electricity suppliers that serve customers at the capped price expecting to be reimbursed the differential by the Executive. Not only have the payments been delayed so far, but the formula used to calculate the subsidy (the price differential) does not guarantee that the supplier recovers its expenditures.

Although in the right direction of the cost-plus pricing model, the latest form of the “cap and subsidy” goes halfway into addressing the wide margins made by some traders, ignores the reality of existing contracts and lacks precision.

(Photo source: Prudencio Alvarez | Dreamstime.com)