PreturiCorecteLaGaze: Dominant position granted to suppliers in gas market liberalization for non-customers as of January 1st 2015

by Dumitru Chisalita, Energy Expert

www.dumitruchisalita.ro 

The way in which the switch from the regulated market to the free market takes place for non-household consumers is marked by a dominant position of suppliers (suppliers which sold gas at regulated prices to non-household customers until December 31st 2014) in relation to non-household customers. Under the Gas Law, the date of January 1st 2015 was established, two and a half years ago, as the date when the regulated market disappears for non-households, establishing the market in which gas can be traded freely.

2 and half years ago, the “Master plan” for the gradual move from the liberalized market to the free market was established, which included two directions:

-The gas price deregulation schedule, ensuring a gradual gas price increase, from the regulated price to the market price. It was implemented by the Government of Romania under several Government Decisions.

– The plan for the dissemination of information to customers, ensuring the preparation of customers for January 1st 2015, which mainly stipulated obligations for the gas market regulator, which had to be carried out during 2012 – 2014 and which haven’t been fulfilled.

Gas market liberalization started two and a half years ago; customer preparation for January 1st 2015 was an essential component of the “Master plan”, which did not exist. On November 6th 2014 (less than 30 working days before the deadline when non-households had to exit the regulated market), ANRE imposed for suppliers selling gas in the regulated market for non-household consumers to inform them regarding the obligation to move to the free market no later than on December 31st 2014 or accept a continuation for 6 months of the contract with the existing suppliers in December, but at a price proposed (imposed) by the supplier. Naturally, the suppliers, to prevent losing their customers, sent to customers a formal, incomplete, deficient etc. “information” at the end of November 2014, so that they could understand that continuing a relationship with the same suppliers was the best thing. Lack of information of customers, the short time allocated to negotiation between suppliers and non-household customers, lack of mediation of misunderstandings resulting from negotiation between former non-household regulated customers and gas suppliers are premeditated elements, which gave suppliers a dominant position on January 1st 2015. After “convincing” customers on the liberalization process, in December 2014, suppliers submitted disadvantageous gas offers for their own non-household customers, understanding that:

a) Customers, even if they had the knowledge and capacity, wouldn’t have time to negotiate, due to days off during December 2014,

b) According to the Gas Law, if until December 31st 2014 no supply contract was concluded, a double illegality would be committed:

– by the supplier – gas supply without a contract;

– by the customer: fraudulent consumption in absence of a contract.

And there is a legal obligation of suppliers to stop gas supply.

c) In accordance with the Gas Law, ANRE cannot intervene in the mediation of (pre-commercial) situations occurred between gas suppliers and non-household customers forced to become eligible consumers on January 1^st 2015, although divergences occurred between suppliers and customers are a result of:

– the process of mandatory move from the regulated market to the liberalized market;

– the fact that the process took place during the winter holidays, characterized by the lack of activity;

– the fact that information and offers for the gas amounts related to 2015 were sent less than 30 working days before the date of December 31st 2014, when the existing contracts expired;

– the fact that the process happens in full winter, which makes that any limitation of gas supply can bring material damages;

– lack of implementation of the program of dissemination of information on switch from a regulated market to a free market (obligation according to the Memorandum on deregulation of regulated prices to implement a master plan for consumer information, obligation which hasn’t been honored)

– the establishment of the semi-regulation period of 6 months imposed by ANRE (January 1st – June 30th 2015), ensuring the gradual move from the regulated market to the non-regulated market, in order to protect non-household customers and ensure the continuity of gas supply.

Customers will be put into the only situation possible to accept their offer, otherwise having the risk of being disconnected from gas in full winter. Gas market liberalization for non-households was turned from an opportunity for customers into an opportunity for suppliers. We will continue to present how much gas prices offered to non-households increased on January 1st 2015, what was the price reduction obtained by some non-households (very few of them had the necessary knowledge to carry out a fair negotiation) in the negotiation on January 1st 2015, what are the “dangers” of supply agreements submitted to customers, what state institutions had to do and haven’t etc. In order to develop the gas market, for real liberalization, for protecting customers by providing essential information, sending knowledge necessary for negotiation, advice etc., I decided to launch the campaign Fair Gas Prices.