It was highly predictable that reorganisation (rather than restructuring, as it was presented) of the electricity production system - carried out by Mr. Berceanu when he was a Minister of Economy several years ago, and which was confined to the institutional separation by energy sources (hydro, thermal, nuclear) - would be a failure. At least in that it made no contribution whatsoever to enhancing efficiency and improving services to consumers.

Termoelectrica, where the problems were, took over many of the issues which already existed in the energy colossus before the splintering. Until the European Union came up with its so-called “energy market deregulation” things dragged along one way or another. And we exclusively refer to the operational aspect of the system. Nuclearo-Electrica and Hidroelectrica produced, for objective reasons, much cheaper energy, but the energy they supplied went into an integrated system and calculations were made as such. On the whole, i.e. in a system with both cheap and expensive sources, an average price resulted, which served as a reference point for calculating the sale tariff. Since, for social reasons, this tariff was under costs, the problem appeared: the need to gradually increase tariffs in order to cover costs.

The liberalisation requested by the European Union has completely upset things. The deregulation principle sounds good: each consumer (first the big-sized one, the so-called “eligible consumers”, but later on the small ones too, such as the households) should be free to choose their supplier. The selection is presumed to depend on the price criterion. It all would be nice and smooth, only that in order to cover consumption, we need all the energy we produce, therefore the expensive one, too. So, with each consumer naturally choosing the cheap source supplier, those who produce energy from more expensive sources would go bankrupt and the market - rather than the Government—would wind them up. But thins are a lot more complicated, and we don’t quite know who should decide to wind up whim and who should buy the expensive, but necessary energy!

Before such crucial matters were figured out, the market deregulation was launched, with remarkable recklessness. What does it come down to? The worst! Intermediaries emerged - those believed to represent the market itself - which should facilitate the supplier choice by the consumers. Naturally, it all turned into a petty parody! The intermediaries - the “smart alecs,” as Mr. Basescu called them once, long ago, before forgetting all about them! - only bought cheap energy, i.e. from hydropower plants, but also from some thermal power plants which are slightly more efficient, and started to sell it, for much higher prices of course, to various big-sized consumers.

Indirectly, household consumers who cannot choose their suppliers - and will not be able to, in practice, even when rated as eligible in theory - are only given access to expensive energy.

For “eligible” consumers, no general cost/tariff calculation is made. Such calculations are only made for household consumers. Which is outrageous! And for such consumers, calculations say they have to pay ever higher tariffs. Of course they have to. Not only can they buy only the remaining energy, that is the one produced from expensive sources, but they also have to cover the losses generated on the whole by the fact that some buy cheaper energy, and the host of intermediaries cash hefty gains for doing nothing!

by Ilie Serbanescu

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