Romania, Government extends provisions that prevent disconnection of customers due to overdue bills

, SEE Energy News

Although it was announced that the Government is preparing to repeal, by emergency ordinance, the legal provision introduced last year following the start of the coronavirus pandemic, which forbade the disconnection of electricity and natural gas consumers during the state of emergency, the state of emergency, along with the said legal provision, was extended until 15 August.

The industry complained that the measure, introduced last year, led to the accumulation of arrears on the payment of consumer bills worth almost 50 million euros.

The direct damage to the rights and interests of electricity and natural gas suppliers is indisputable. Moreover, although the measure should have been a temporary one, it has become a perpetual one, because the state of emergency in Romania has lasted for more than a year and it is not even predictable when it will end. As such, the impact on suppliers’ revenues extended beyond what was necessary to protect the interest taken into account by the text of the Ordinance.

The impact of this measure is felt in a cascade on all parties involved in the supply of electricity and especially on electricity suppliers, given that approximately 60 % of the value of the amounts collected by them from final consumers are amounts in transfer (pass-through). In Romania, the application of these measures makes it impossible for electricity suppliers to recover their outstanding debts because they lack any effective means of coercing consumers. Moreover, the measure also imposes the obligation on electricity suppliers to continue the supply even if the final customer has already accumulated outstanding debts, even at the risk of supporting fraudulent electricity consumption.

Several energy suppliers filed a petition with the Ministry of Energy earlier this year, informing the authorities about the problems faced by electricity suppliers in the context of the application of GEO 70/2020 and submitted proposals to amend the prejudicial text.

Considering the damages suffered by the energy suppliers, which led in some situations to insolvency claims, two suppliers already filed in court an action in contradiction with the Romanian Government, through the General Secretariat, as issuer of GEO 70/2020, as well as with the Romanian State, through the Ministry of Finance, for damages caused by these legal provisions, a file registered with the Bucharest Court of Appeal.