VILNIUS – Regulation of independent electricity suppliers is insufficient and therefore will be tightened in the near time, Energy Minister Dainius Kreivys has said.
“Today’s regulation has clearly proved to be insufficient, therefore, the ministry intends to draft legislative amendments, which would increase financial liabilities and capital requirements for such companies and, respectively, requirements for a high level of competence in the energy area,” he said during a news conference on Monday.
“This will be done in the near time, within several weeks,” the minister said referring to the case of Perlas Energija, an independent electricity supplier in Lithuania, which said on Friday that it was suspending its fixed-price electricity plans for all customers.
Legislative amendments would be submitted to the government within the next few weeks and would be debated by the Seimas early in its fall session.
According to Kreivys, tighter regulation would apply to all market players, including incumbents and newcomers: “I think it would apply to all market participants, the only difference will be the period of time granted to bring those competences in line with requirements.”
He stressed that Perlas Energija had to cease its unlawful actions, otherwise it might lose its license of an electricity trader.
“The company is harming consumers’ interests. According to VERT [Lithuanian National Energy Regulatory Council], the company must cease its unlawful actions as soon as possible. Otherwise, it may face fines or even the loss of its license or its authorization for trade in electricity,” Kreivys pointed out.
Kreivys said he did not consider himself to be personally responsible for insufficient regulation as the existing arrangements had been approved by the previous government.
According to him, changes to regulation were meant to rectify the situation, and not to play a blame game.
“First of all, I have to point out that it was the previous government that adopted the existing regulation. However, we are not playing a blame game, we are looking forward, what should be done, rectified, and we are taking those decisions now. We admit that regulation is too weak, which has been proved by the case of Perlo Energija. Such a case would be impossible if we had stronger regulation,” Kreivys said during the news conference.
Perlas Energija announced on Friday it was changing plans for its all customers, and those on fixed-price plans would be moved to the variable-price plan ‘Exchange’, in response to a surge in electricity prices.
According to the CEO of the company, which has approximately 180,000 customers, at least 700 households terminated their contracts with the company during the weekend.
VERT stated on Monday that such actions by Perlas Energija were unlawful and harmed consumers’ interests.
According to the Center of Registers, Perlas Energija, which was established in July 2020, reported 9,700 euros in revenue and 613,500 euros in losses for 2020 and has not yet filed its 2021 report.
Perlas Energija is the only company among seven electricity suppliers to have no generation capacities of its own.