New methodology for calculating the tariff for electricity creates equal conditions for distributors – ANRE

The Administration Board of the National Agency for Energy Regulation (ANRE) approved on Friday, August 10, a new universal methodology for calculating the tariff for electric energy supplied to consumers by all the distribution companies. The document will come into effect once ANRE’s decision is published in the “Official Gazzete”. Union Fenosa Group in Moldova disputed ANRE’s decision and said it reserved itself the right to take action in court. According to the general director of ANRE, Vitalie Iurcu, a new methodology was needed to create equal conditions for all the distribution companies. The document contains a single methodology for calculating the tariff for electric energy which will be applied to Union Fenosa, as well as to RED Nord and RED Nord-Vest. The fresh methodology stipulates applying a universal rate of return of 13% to all the distribution companies. Until now, the rate of return for Union Fenosa was 23%. ANRE officials explain that reducing the rate of return for Union Fenosa was necessary since the previous rate was set in 2000, when the economic, political and social situation was different. According to them, the situation has changed and the investment risks have dropped substantially. “A rate of return of 13% is reasonable and sufficient for attracting investments”, ANRE general director said. In Ukraine the rate constitutes 11%, in Romania – 10% and in the Baltic countries – 9%, said Vitalie Iurcu. The Union Fenosa representative, Silvia Radu, expressed her disapproval of the new methodology approved by ANRE, mentioning that the company reserves itself the right to dispute it in court. She regretted the fact that ANRE ignored the proposal to involve foreign independent experts in drafting the document. According to Silvia Radu, such a methodology for calculating the tariff price will harshly hit energy distributors, which will record negative results and will lose investment capacities. As a result, consumers will be the ones to suffer most. The same argument was defended by RED Nord-Vest representatives, who complained about unable to clear their debts. Only RED Nord approved the new methodology, labelling it a right move.