PreturiCorecteLaGaze: Dull “negotiation” of gas contracts between suppliers and non-household customers on January 1st 2015

by Dumitru Chisalita, Energy Expert

www.dumitruchisalita.ro 

At customer level, the lack of knowledge specific to a competitive gas market, but also lack of interest of institutions for customers makes them be afraid to act. However, those who dared do it have faced major obstacles. We present below such an experience. In mid-November 2014, the customer receives a notice from the gas supplier, announcing the customer that as of January 1st 2015 the market of non-household customers would be liberalized and that it had two options:

– concluding by December 31st 2014 a contract in negotiated regime or

– without this action, as of January 1st 2015, the customer will purchase gas at the price set by the supplier. In mid-December 2014, after analyzing the gas offer, the customer notified the supplier on the intent to exercise its eligibility right and on opening binding negotiations on the conclusion of a gas sale-purchase contract, asking to ensure gas supply until the completion of negotiations, including after December 31st 2014. On this occasion, the customer submits a counteroffer to the supplier to the offer received. Invoking the legal holidays, the supplier answers in the first days of 2015, mentioning:

As mentioned in the notice sent by you, a gas sale-purchase contract could be concluded by December 31st 2014, with negotiated prices. Without a negotiated contract concluded, gas supply will be made by our company as of 01.01.2015, at the price proposed by us, according to the Order issued by ANRE no. 107/2014, art. 3 and art. 4.

The customer tries to seek help from ANRE, but it does not have the legal framework to intervene in the mediation of pre-contractual situations in the gas market. But the fact remains that it’s ANRE that should have dealt with the creation of this legal framework. Suppliers, hidden behind an ANRE Order, have disregarded notices – even binding -, counteroffers etc. from the customer, waiting for the moment to pass to be able to impose the desired price: “… without a negotiated contract concluded, gas supply will be made by our company as of 01.01.2015…” It is our opinion that ANRE did not want to get involved in the mediation of pre-contractual situations occurred in the gas market, hiding behind the idea that it cannot intervene in the free market and that there’s no legal framework. According to the gas law, ANRE has the possibility to establish “Committees for settling disputes, on the wholesale and retail markets, occurred between the participants to the gas market” which carry out their activity based on an Organization and Functioning Regulation approved by ANRE. In conditions in which for 2 years we have been in full process of gas market liberalization, moving customers from the regulated market to the free market, which obviously gives birth to disputes, ANRE hasn’t found the time or interest for a Regulation to settle disputes in the market, but found the time to approve a Regulation on settling disputes on access to systems. This is only one aspect of abuses faced by non-household gas consumers in Romania in the period prior to the market liberalization. On the one hand, suppliers showed interest in neither customer information or ethics regarding their market partners – the customers. The Regulatory Authority, by lack of involvement in the creation of a full and fair legal framework for all market players – so for consumers as well – has reduced to the minimum the level of real possibilities which gas consumers have in choosing their gas supplier and to a contract actually negotiated with the supplier. Both approaches are far from the European practice of regulators in other markets that have experienced or are in the same stage of the gas market. Definitely, suppliers involved, which now cope with market liberalization, will not voluntarily take enough steps for a complete, proper and opportune information of customers regarding the opportunities they have. Therefore, the Regulator must immediately “awake” from the state of lethargy and impose a short-term action plan intended to remedy deficiencies of actions missed or not taken in the past, and to closely monitor not only the quantity of actions imposed to suppliers, but also the quality (e.g. ethics) and their effect (the number of customers who have renegotiated/changed/optimized their contract and/or supplier).