Fair Gas Prices. Law requirements do not apply to ANRE

by Dumitru Chisalita, Energy Expert

Nonperformance of the gas market starts from the lack of market regulations, some of them being obligations of ANRE arising from Law 123 and which haven’t been met in the 3 years after the apparition of the law and which show no signs of being achieved. The lack of legal framework and especially of an impartial watchdog, as ANRE should be, leaves room for the “wise guys”, even if they carry the names of multinational companies. We will further present an important reason why the Romanian gas market cannot work and, moreover, why the gas law does not produce adequate effects. This law was published in 2012, and in order to apply it was required that ANRE established the “implementation norms” as regulations, methodologies, codes etc. Even if ANRE, the Parliament of Romania (which coordinates ANRE’s activity), the civil society, through Expert Forum reports on ANRE’s role in the market, present us the activity of the institution in superlative terms, the reality shows that 30 obligations set by law and other 8 we believe absolutely necessary for the functioning of the gas market haven’t been fulfilled, although the terms were long exceeded.

We will present next the obligations stipulated by law to be met by ANRE regarding the gas market (by specifying the article of Law 123/2012 that set the obligation):

1. Market model. Code of the commercial market (art. 100, point 72)
2. Regulation regarding the functioning of the balancing operator of the gas market (art. 100, point 73)
3. Network code for gas distribution (art. 138, paragraph 3)
4. Regulation on access to distribution systems (amendment of GD 1043, as a result of amending Law 123)
5. Regulation on access to transmission systems (amendment of GD 1043, as a result of amending Law 123)
6. Regulation on access to upstream pipeline systems (amendment of GD 1043, as a result of amending Law 123)
7. Regulation on access to LNG (art. 147)
8. Regulation on ensuring the exchange of information and operative management of the gas market (art. 130, paragraph 1, letter o)
9. Regulation on end non-household customers using gas in industrial processes (art. 100, point 26, deadline December 1st 2014)
10. Methodology on determining the necessary technological consumption of an economic operator in order to ensure the necessary technological parameters for carrying out the distribution activity and, respectively, of the gas transmission activity (art. 100, point 35)
11. Regulation on gas odorisation in commercial points for the hand over-take over of gas to customers directly connected to upstream pipelines, as well as to distribution systems (art. 124, letter f)
12. Regulation for drawing up and monitoring the balance of gas entering into the system and, respectively, coming out of the system; (art. 130, paragraph 1, letter i)
13. Regulation for ensuring the physical balance of the NTS by ensuring the obligation of the transmission operator to hold in underground storage facilities or ensure gas acquisition; (art. 130, paragraph 1, letter j)
14. Regulation regarding the odorisation of gas at the exit from the NTS; (art. 130, paragraph 1, letter k)
15. Methodology on substantiating tariffs to be paid by system users in case of physical imbalance; (art. 130, paragraph 2, letter f)
16. Regulation on services of gas storage in the transmission systems; (art. 130, paragraph 2, letter g)
17. Regulation on gas odorisation in commercial points for the handover of gas to end-customers directly connected to distribution systems (art. 138, paragraph 1, letter b)
18. Regulation on the connection of third parties to the distribution system (art. 138, paragraph 1, letter d1)
19. Regulation on the connection of third parties to the LNG (art. 148)
20. Regulation on measures needed to be carried out by the distribution operator in case of interventions by unauthorized persons on regulation and metering facilities at the property limit. (art. 138, paragraph 2, letter j)
21. Methodology on setting the distribution tariffs in a closed distribution system (art. 139, paragraph 3).
22. Regulation on authorizing the establishment and operation of a closed distribution system (art. 139, paragraph 5)
23. Regulation for issuing the operation license for a closed distribution system. (art. 139, paragraph 5)
24. Procedure for taking over in use by the distribution operator or by the transmission and system operator of objectives partially or totally financed by a third party with the stipulation of financial conditions (art. 151, paragraph 3).
25. Methodology for the recovery of the amount invested by a third party in transmission and distribution systems (art. 151, paragraph 4).
26. Procedure for the preparation of technical and economic studies for determining the feasibility of investments in the gas sector asked by third parties (art. 151, paragraph 5).
27. Regulation on granting establishment permits, as well as on conditions of operation of direct main pipelines (art. 152, paragraph 4).
28. Technical and commercial regulations on gas treatment and compression for the production of CNG, as well as some on their storage in containers from filling stations (art. 155, paragraph 1).
29. Technical LNG code (art 156)
30. Regulation for the organization and functioning of the committee for settling disputes, on the wholesale and retail markets, occurred between the participants to the gas market (art. 174, paragraph 10)
31. Mechanisms for the flexibility of the gas market
32. Methodology for setting the interruptible tariffs for interruptible transmission services.
33. Methodology for setting the interruptible tariffs for interruptible distribution services.
34. Regulation on interruptible services of extraction/injection in storage facilities
35. Regulation for the allocation of quantities traded
36. Network code for gas storage
37. Binomial pricing of distribution services
38. Binomial pricing of services of gas injection/extraction in storage facilities

ANRE extensively uses its coercive force and gives fines of RON 500,000, at the first violation of the law, but the violation of 30 obligations stipulated by law for ANRE (exclusively for the gas market) brings no penalty against it.

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