ecristea 13 January 2022

Long awaited amendments to the Romanian electricity (and gas) law

1. Preliminary remarks
[1] On 31 December 2021, Government Emergency Ordinance no. 143/2021 for the amendment of Law no. 123/2012 on electricity and natural gas, as well as for the amendment of other regulatory acts (“GEO 143/2021”) was published in Official Gazette of Romania no. 1259 and entered into force on the same date.
[2] GEO 143/2021 was mainly intended to transpose into national law Directive 2019/944 on common rules for the internal market for electricity and amending Directive 2012/27/EU (“Directive 944/2019”), and, thereby, to close the infringement procedure initiated by the European Commission against Romania in relation to the transposition of Directive 944/2019. However, the most anticipated amendment and the main novelty brought by GEO 143/2021 consists in the exclusion of the obligation to trade electricity exclusively on centralized markets. Basically, this puts an end to the 10-year ban on the conclusion of directly negotiated bilateral power purchase agreements (“PPAs”) (except for state owned entities which are still obliged to sell part of their output on the centralized markets). This change was vividly requested by market players and is expected to encourage the development of new capacities by facilitating access to financing.
[3] Furthermore, we underline that, according to GEO 143/2021, within 6 months from its enforcement, the Romanian Energy Regulatory Authority (“ANRE”) has the obligation to amend, where necessary, the secondary legislation in line with the provisions of GEO 143/2021. Until the amendment, where necessary, of the secondary legislation, all regulatory acts issued pursuant to Law no. 123/2012 on electricity and natural gas (“Law 123/2012”) shall remain applicable, except for provisions that are contrary to the amendments brought under GEO 143/2021.
[4] In addition, although GEO 143/2021 is already in force starting with 31 December 2021, it should be underlined that, according to the Romanian legislative procedures, GEO 143/2021 (as any other government emergency ordinance) will still be subject to approval by the Romanian Parliament, and also the fact that there is no specific deadline within which such approval (that can be adopted by the parliament without amendments or with amendments) or rejection by the parliament, as the case may be, should occur.
[5] The amendments brought to Law 123/2012 under GEO 143/2021 are numerous and substantial. A selection of the aspects which seem more important is presented below.