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Power distribution system hurts competition

Published

September 3, 2015

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Published:

September 3, 2015

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According to a recent warning report from the Competition Council (Consiliul Concurenţei) of Romania, the fee system for the distribution of electric power, which differs by geographical areas, negatively affects competition depriving the consumer of benefits, unjustified even by the security of the national power grid. The head of the Competition Council, Bogdan Chirițoiu told portal Balkans.com about the measures taken to protect consumers and ensure transparency in the electric power sector: „This analysis offers us an image of the electric power sector, and what we saw was the full half of the cup: the fact that the liberalization of the electricity market entailed a rise in competition and lower prices for industrial consumers, at least the ones that function under a liberalized system. Moreover, the market is still marred by a number of problems, such as the lack of predictability, you cannot conclude long term contracts, which is why our main recommendation is to improve the energy stock market, the instrument that transacts energy, which right now does not have enough facilities to allow for long term contracting.“

He stressed there was always room for improvement in regulation. „We have to make sure that the fees in the monopoly area, the conveyance and distribution area, are as low as possible, to make sure there are no losses, and to create predictability in prices, to allow long term contracts, so that a large scale energy consumer may know what will come in a few years, not for about a year or less in the future. There may be an even simpler solution. We could sign contracts for a few years,“ Chirițoiu said.

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