Stating with 1 January 2015, the Methodology for the determination of reactive electricity payment obligations and the regulated price for reactive electricity approved by way of ANRE Order 33/2014 (the “Methodology”) entered into force.

The Methodology sets out the method of calculation of the reactive electricity tariff owed by consumers to grid operators for the electricity inserted into the grid. The tariff is also applicable to production units with respect to their own consumption (i.e. wind parks, photovoltaic plants, hydro plats).

The method of payment of this tariff is established in accordance with the legal provisions of the transport contract / the distribution contract concluded between the grid user and the grid operator of the connection point. The user may pay the tariff directly to the grid operator or through its electricity supplier.

For example, we have seen in practice that grid operators prefer to invoice the reactive electricity tariff though an electricity supplier acting as an intermediary. The reactive electricity is a component included in the price of electricity and can be identified separately in the invoice issued by the electricity supplier. The exact amount is based on the measurements of the grid operator.

Although this is a mandatory regulated tariff, the Methodology sets out in Article 8 several exemptions from the payment obligation, with the most notable one being that dispatchable production units are exempted under certain circumstances.

The technological consumption of a dispatchable production unit / dispatchable group registered within a certain working interval (Romanian “interval de decontare”) is exempted from the payment of the reactive electricity tariff if the below conditions are complied with:

(i) the production unit performs voltage / reactive power regulation at and within the parameters required by the energy dispatcher at the delimitation point in the grid;

(ii) the delimitation point whereby consumption occurs is in the same grid as the one where voltage/reactive electricity is ensured.

To benefit from payment exemption, the grid user must also submit supporting documents to the grid operator attesting to the fulfilment of the above-mentioned conditions. The Methodology does not clearly define what supporting documents means. In our opinion, if a grid operator issued a technical connection approval (Romanian aviz tehnic de racordare) for a dispatchable production, followed by the technical connection certificate, then this exemption should be applicable automatically as the respective grid operator is already aware of the circumstances. However, a safer interpretation would be that the term “supporting documents” refers to the original dispatch orders for reactive energy markers for the respective month bearing the stamp of the dispatcher.

I have encountered several cases in practice where not all grid operators implemented the provisions set out in the Methodology immediately (i.e. as of 1 January 2015). In a case of a dispatchable production unit, the tariff for reactive electricity continued to appear in the monthly electricity invoices up to over a year after the Methodology entered into force.

The provisions of the Methodology were enforced only when the grid operator was notified by grid user and was requested to reimburse the amounts invoiced. This was very surprising especially considering that the final provisions of the Methodology explicitly set out an obligation on behalf of the grid operators to adjust the provisions of their transport/distribution services contracts concluded with grid users in order to reflect the provisions thereof.

Therefore, it was the grid operator that had a legal obligation to stop determining the values for reactive energy for a dispatchable unit, in accordance with the provisions in force, or at least find a way with the electricity supplier to inform all dispatchable units exempted from the payment of this legal tariff.

When approached with a request to reimburse the amounts unjustly collected, the grid operator refused on the basis that no supporting documents have been submitted prior to the respective month of invoicing and therefore it was not aware of the fact that the production unit carried out its own voltage control.

Following such refusal, a complaint was filled with ANRE requesting the reimbursement of the amounts representing the tariff for reactive electricity collected for approximately 14 months. Both parties were summoned during a formal hearing with a committee of ANRE representatives and successfully managed to prove that the grid operator was, in fact, aware that the grid user carried out its own voltage control during the respective working interval.

ANRE issued a favorable decision on behalf of the grid user and deemed that the grid user was, in fact, exempted from payment the reactive electricity tariff. The grid operator had to reimburse the amounts unjustly collected after 1 January 2015.