On 28 June 2016, the Romanian Parliament adopted the “Law Amending and Supplementing the Romanian Energy and Natural Gas Law” (the “Law”). The Law modifies the legislative framework for electricity trading on the Romanian energy market.
Despite the sustained efforts of Romanian energy suppliers for the reintroduction of directly negotiated bilateral sale-purchase agreements (i.e. power purchase agreement “PPA”) to the competitive wholesale market, the Romanian Parliament decided to grant energy suppliers only the right to conclude PPA’s with other producers for obtaining an energy mix in order to trade electricity on the domestic market or to export it. However, this provision is not aligned with other provisions of the Energy and Natural Gas Law which provide that producers have the obligation to offer, in a public and non-discriminatory manner, all the electricity they produced on the competitive wholesale market, excluding therefore the possibility to conclude PPA’s.
In addition, the Law creates some confusion on how the process of forming the energy mix will be regulated. Until now, energy suppliers formed the energy mix and, giving the producers this prerogative, may cause difficulties regarding its implementation due to the lack of secondary regulations which are not provided in the Law.
Another modification introduced in the Law requires that electricity agreements concluded when exporting electricity be published by the Romanian electricity market administrator (OPCOM) in accordance with the Romanian Regulatory Authority for Energy’s regulations. However, this provision may conflict with the confidentiality clauses in the European Federation of Energy Traders agreements which, in case of non-compliance, may affect the execution of the respective agreements.
The Law also obligates the Electricity Transmission System Operator (ETSO) to ensure an energy production mix as a continuous flow of electrical power in the case of disconnection of any energy provider so as not to affect consumers. This obligation comes in contradiction with the European rules which do not confer ETSOE the right to be involved in the activity of electricity production.
Modifications of the Law are expected as the President of Romania has asked the Romanian Parliament to re-examine its provisions. The Association of Electricity Suppliers in Romania does not support the Law, which it considers may seriously affect participants to the Romanian energy market.