Authorities and suppliers, unprepared for electricity market liberalization in RO

Romanian state-controlled hydropower company Hidroelectrica admitted that it is not prepared to accept residential customers sooner than two-to-three months, according to a company's statement on January 6 quoted by Economica.net.

Hidroelectrica is among the major new entrants on the retail electricity market, and its offer to household clients is among the most competitive.

The electricity market for household clients was fully liberalized on January 1, 2021, but most of the customers targeted by this measure haven't signed new contracts on the free market yet.

As a result, millions of households in Romania could pay significantly higher electricity bills starting this month until they sign new contracts.

Blaming the market regulator ANRE for the lack of transparency and poor design of the market liberalization on January 1, minister of energy Virgil Popescu came up with a brand new idea to address the problems that have appeared in this process, Hotnews.ro reported.

He proposed that the residential end-users should get by default to "the best offer in the portfolio of the incumbent electricity supplier."

The Government will pass a bill in this sense after the mid of January, "unless some things happen," the minister said.

His proposal is indeed an improvement from the regulations that automatically switch consumers to the worst tariff in the incumbent suppliers' portfolio (the so-called universal service offer) until they sign free-market contracts.

However, the solution is insufficient for various reasons. Firstly, this still does not address the discrimination against independent electricity suppliers (like Hidroelectrica). Secondly, it is unclear why a supplier would hold better and worse offers in its portfolio (rather than offers that address various needs) and who gets to decide which is the best one.

The energy minister also instructed ANRE to open a hotline for residential customers. This is very interesting since ANRE has requested the electricity suppliers to answer any call within three minutes - or customers can ask for compensation.

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