Romania, Government waits for EC’s recommendations before adopting final “cap and subsidy” scheme

, SEE Energy News

According to the Social Democratic Party (PSD) leader Marcel Ciolacu, the Romanian Government is waiting for the recommendations from the European Commission (EC) before adopting the final form of the “cap and subsidy” scheme for energy prices.

At this moment, energy suppliers and consumers are faced with uncertainty related to the magnitude and the scope of the subsidies extended by the Government, which would be mainly financed out of the windfall profit tax charged to energy producers.

Ciolacu also said that the scheme should preferably be extended until 2025, and it should follow as much as possible European guidelines with a view of unitary treatment across the member states.

Emergency ordinance OUG 119/2022 that regulates the scheme was passed with amendments by the Senate in late September, expanding the list of those benefiting from a capped price for consumption until 31 August 2023.

According to the amendments adopted by the Senate, the number of those who will benefit from capping increases, and the settlement threshold of 262 euros/MWh is eliminated for suppliers of last resort, with the exception of customers that were recently taken over. At the same time, energy producers have the obligation to sell through directly negotiated bilateral contracts at least 70 % of their own production available from their own production, to suppliers with end customers, transmission system operator Transelectrica, distributors and large industrial consumers.

For their part, suppliers who have at least 100,000 customers in their portfolio and a consumption of at least 500 GWh in 2021, have the obligation to conclude contracts for a minimum term of three years covering 70 % of their customers’ consumption for the next three years.

The new law also provides that the final price billed by electricity suppliers is a maximum of 0.14 euros/kWh, including VAT, for household customers whose average monthly consumption is between 0 – 100 kWh and a maximum of 0.16 euros/kWh , with VAT included, for household customers whose average monthly consumption is a maximum of 255 kWh.

The Senate established that a capped price for electricity will benefit both household consumers who in 2021 had an average monthly consumption of less than 300 kWh, but also those who, although in 2021 had an average monthly consumption of more than 300 kWh, this year will save and fall within the established ceilings.

The final price billed by natural gas suppliers is of a maximum of 0.063 euros/kWh for household customers and a maximum of 0.075 euros/kWh for non-household customers.

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