The management of state-controlled Romanian hydropower company Hidroelectrica complained about the company “nearing insolvency” as a result of the emergency ordinance (OUG) 114/2018 that compels the company to deliver certain amounts of electricity to residential users at prices set by the state, Economica.net reported.

“The energy market regulator ANRE compels Hidroelectrica, by an order, to buy expensive electricity from the market and sell cheap to the population, a practice that, in the past, led to the company's insolvency,” the president of Hidroelectrica’s board of directors, Bogdan Badea, said in a press conference on November 15.

Badea referred to an ANRE order published last week for public debate, under which the provisions of the OUG 114/2018 are gradually lifted. Hidroelectrica and Nuclearelectrica are compelled, under this order, to deliver 100% of the needed electricity to households, with the share decreasing to 80% in February and gradually to 0% by June 2021.

Hidroelectrica and Nuclearelectrica account for nearly 50% of Romania’s electricity production while the population’s accounts for less than one quarter of total consumption.

The order published by ANRE thus does not explicitly “compel Hidroelectrica to buy expensive electricity”, unless it has already sold in advance its production expecting full cancellation of OUG 114.

Hidroelectrica reported RON 2.3 billion (EUR 480 million) revenues and a net profit of RON 902 mln (EUR 190 mln) in the first half of this year.

(Photo: Hidroelectrica Facebook Page)

editor@romania-insider.com