Consumers who pick their own firm to complete the grid connection get to pay less compared to those who accept the initial costs proposed by the network operator for this type of work, according to an official statement by the Competition Council.
This is one of the conclusions the preliminary analysis carried out by the Competition Council regarding the branching of the electric networks.
„Through the proposals of adjusting legislation and conditions imposed as a result of investigations, our implication led to the betterment of the competition in this market and the mechanism of contracting the grid connections – through which the consumer directly selects their service provider – managed to lead to the completion of expected objectives regarding the liberalization process of this market”, according to the President of the Competition Council, Bogdan Chiriţoiu, who was cited in the official statement.
Regarding the connection to the natural gas network, the Council noted a significant improvement in the relevant legislation, meaning that consumers can select the authorized operator to carry out the design or execution of natural gas installations and negotiate with them the tariff / charges.
The average cost of connecting to the low-voltage power grid, a network to which most household customers are connected, registered values ranging from 978 lei to 2,602 lei.
At the same time, the average level of the connection tariff for the natural gas network for a household consumer registered values between 943 lei and 3.346 lei during the analyzed period.
Connection costs are influenced by customer dispersal and network architecture, for example, the type of work to be done.
For example, if the network connection involves additional work to expand or resize, and the investment required to complete these works is not included in the distribution operator’s investment plan, end customers must bear the costs of expansion / resizing.
On the other hand, if the expansion work required for the connection is provided in the distribution operator’s investment plan or the concession contract, customers are not required to bear the costs of possible network expansions or resizing.
At the same time, the Competition Council’s analysis pointed out that there are a large number of economic operators holding the necessary authorizations to begin the work in the connection affairs market in order to carry out the designing, execution and verification activities of the connection works.
However, the Competition Council found that there were difficulties in contacting authorized operators because some of them did not update their information on the website of the National Regulatory Authority for Energy (ANRE).
Thus, the Competition Council will cooperate with ANRE to identify measures by which authorized economic operators are obliged to update, within a reasonable time frame, their own contact data made available to users on the ANRE website.
At the same time, in the analysis, the Competition Council found that there is a tendency, especially among natural gas network operators, to call on its own staff to carry out the design and execution activities of the connection facilities.
By favoring their own staff, there is a risk that distribution operators have anticompetitive behavior in relation to firms that are authorized by ANRE to perform design, execution and verification of connection facilities.
“Distributors need to understand that they are not allowed to use their position on the electricity or gas distribution market in a particular area to influence competition on their related markets, markets that the network operator is also working alongside other competitors “, the president of the Competition Council stated.
In this context, the Competition Authority recommends introducing an obligation for distribution operators to inform users of their own right that they have the possibility of selecting – all by themselves – the qualified operator from the list published on the ANRE website to carry out the connection operations.
At the same time, between 2015-2018, the number of gas connection applications registered at national level increased steadily and the duration of the connection process was generally quite large, with differences between various network areas.
For example, in the case of connection to electricity grids, in 2017, the average duration of the connection to the low voltage grid was 83 days and while the one to the medium voltage network was of 234 days. In the case of connection to the natural gas networks, according to the concessionary distribution operator and the size / expansion of the network it administers, the average connection time has been very different between 21 days and 270 days.
In the course of the analysis, the Competition Council noted that the long duration of the connection process is mainly caused by the difficult collaboration of the operators with the local authorities in order to obtain the approvals and the authorizations stipulated by the legislation, necessary to carry out the connection works.
As a result, the competition authority recommends amending the legislation so that clear deadlines for handling requests are put in place, including for local authorities involved in the connection process.
Competition representatives remind that following an investigation by the Competition Authority, E-Distribution Muntenia SA is committed to taking steps to increase the transparency of the electricity grid connection process and to promote consumer rights in each phase of the process, ensuring fair and non-discriminatory treatment for all participants in the process.
In this case, the investigation focused on a potential abuse of a dominant position, manifested by possible discrimination of companies in the distribution-related services market as a result of selecting companies that develop solution studies, designs and carry out electrical installation work, criteria other than that stipulated in the public procurement procedures or the free choice of the user, as well as by influencing the duration, connection costs to the Bucharest electricity grid and the users’ option to choose the related service providers.
At the same time, during this investigation, the distribution operator undertook actions in the form of periodic meetings with the representatives of the local authorities, in order to improve the collaboration with them. The measure was taken in order to reduce the duration of the network connection process and if the regular meetings with the local authorities initiated by E-Distribution Muntenia SA prove to be effective, the Competition Council will recommend that this approach be extended to all market operators.
The Competition Authority is currently conducting several investigations into possible abuses of a dominant position on the market for technical project approval, reception and commissioning of the gas utilities of Gaz Sud SA, Distrigaz Sud Retele SRL or Megaconstruct SA (company that proposed commitments to eliminate anticompetitive concerns).