Currently have any other measures been approved in relation to the possibility of interruption or suspension of water, electricity or natural gas supply as essential services?

Yes. Decree-Law No. 56-B/2021, of 7 July, duly updated by Decree-Lao no. 70-A/2021, of 6 August, which took legal effect on the 1st of July, determines that until the 31 of December 2021, the suspension of the supply of essential water, electricity, natural gas, piped liquefied petroleum gases and communications services is not allowed.

The mentioned regime applies to consumers, when motivated by unemployment, a fall in household income equal to or greater than 20%, compared to the income of the previous month (the statement of the fall in income will be made under the terms of an ordinance to be approved ) or by infection with the COVID-19 disease. Under these terms, consumers may request the unilateral termination of telecommunications contracts, without compensation to the supplier; and/or by the temporary suspension of telecommunications contracts, without penalties or additional clauses for the consumer, resuming on 1st of January, 2022 or on a date to be agreed between the supplier and the consumer.

 If there are outstanding amounts relating to the provision of the aforementioned services, a payment plan must be drawn up, within a reasonable time, by agreement between the supplier and the consumer, appropriate to the current income of the latter.

 

What exceptional measures were approved by ERSE within the scope of the National Electric System and the National Natural Gas System?

ERSE’s Regulation No. 836/2021, of 7 September, repristinates exceptional measures, contained in Regulation No. 255-A/2020, of March 18, Regulation No. 356-A/2020, of April 8, and Regulation No. 180/2021, of March 2, all applicable to provision of energy supply services as essential public services, following the COVID-19 pandemic.

In particular, the possibility of splitting billing amounts to final customers, who are unemployed, have a fall in household income equal to or greater than 20% or due to infection by COVID-19, in a maximum of up to 12 monthly installments, regarding the amounts due between 1st of July, 2021 and those that may be billed under legal measures that impose the prohibition of interruption of supply to end customers.

Other customers, even if they do not comply with the requirements referred to in the previous paragraph, may also benefit from a payment plan in installments of the respective amounts.

Was the moratorium on grid access charges applicable to suppliers renewed?

Under the new ERSE Regulation, suppliers whose market share as of 31st of December, 2021 do not exceed 5% of the volume of energy sold in the respective market and which have, after the 1st of July, 2021, an increase in the number of unpaid invoices by the respective customers in an amount equal to or greater than 30% when compared to the one verified in the last 6 months prior to 1st July 1, 2021, may require the grid operator an additional moratorium on the payment of the respective charges.

When do the exceptional measures approved by ERSE apply?

The measures approved by ERSE entered into force on the 8th of September, with effect from 1st of July. It should be noted that the provisions of ERSE’s Regulation No. 836/2021 prevail, until the 31st of December 2021, over any other regulatory regimes which may provide a contrary applicable regime.

How is the exceptional and temporary suspension of contracts for the provision of essential services being processed?

Law No. 29/2021, of 20 May, foresees that micro and small companies, sole proprietors and any other companies whose facilities are subject to closure by legal or administrative determination adopted within the scope of the control measures of Covid-19, may request the suspension of water, gas, energy and electronic communications contracts, regardless of binding obligation clauses or other applicable ones, without the payment of new charges and fees.

Only companies in a business crisis can resort to this mechanism. The situation of business crisis, is defined under the terms of the diploma, as those who have had a break in their billing amount equal to or greater than 25% in a calendar month immediately preceding the calendar month to which the suspension request refers to (i) compared to the same month of the previous year or of the year of 2019 or (ii) compared to the monthly average of the six months prior to that period. For those who started their business activity less than 24 months ago, the calculation of the break in billing is carried out in the average monthly billing ratio between the beginning of the activity and the penultimate full month preceding the calendar month to which the suspension request refers to.

ERSE should approve within 5 working days after the entry into force of the diploma (i.e., May 21, 2021) the model for the formal suspension request. After this approval, the service companies have 5 working days to make it available electronically and at their service stations.

Failure by the electricity or natural gas suppliers to comply with the obligations provided for in the legislation applicable to the economically vulnerable end customers constitutes a very serious administrative offense, punishable by a fine that may not exceed, in particular, for each offender, 10% of the respective volume of business carried out in the year immediately preceding the final condemnatory decision issued by ERSE, under the terms of the Energy Sector's Penalty Regime, approved by Law No. 9/2013, of 28 January.

The above-mentioned legal regime entered into force on the day following its publication (i.e., 21 May, 2021) and will remain in force until the end of the year in which exceptional and temporary measures to respond to the SARS-CoV-2 epidemic and COVID- 19 are terminated.

 

  • Commercial relations with consumers

As an energy supplier, can I interrupt supply for reasons attributable to the client?

No. Decree-Law No. 56-B/2021, of 7 July, determined that until the 31 of December 2021, the suspension of the supply of essential water, electricity, natural gas and communications services is not allowed.

Additionally, in case there are outstanding amounts relating to the supply of the aforementioned services by the user, a payment plan must be drawn up, within a reasonable time, by agreement between the supplier and the user, appropriate to the current income of the latter.

 

Has there been any change to electricity?

Yes. ERSE approved the update to the electricity tariff, effective from 1 January, 2021, with respect to the transitory tariffs to end clients; thus, for clients who remain in the regulated market (about 5% of total consumption and less than 1 million customers) or who, having been in the free market, have opted for a similar tariff, the variation in tariffs for Sale to Final Clients in Normal Low Voltage (BTN) is -0.6%. The variation presented is related to the average price of 2020, integrating the downward revision of the energy tariff in April 2020, in the amount of 5 euros per MWh, and which was reflected in a reduction in the transitory tariff for sale to final clients to be in effect until December 2020.

 

  • Licensing

Are the deadlines applicable to procedures to be performed before DGEG suspended?

Pursuant to DGEG Order no. 40/2020, of 8 July, the suspension of the presentation of new requests is maintained, during the period of closure to the public of the DGEG facilities. However, exceptions are foreseen regarding new requests for titles for the attribution of injection capacity, exclusively dedicated to self-consumption generation units (UPACs) with injection in the Public Service Electric Grid (RESP); registration and operating certificates for small-scale generation units (UPPs), for concept demonstration projects or experimental projects, to be implemented in maritime area or in inland waters, or for self-consumption or Communities of Renewable Energy (CER); licenses of production and operation of electric energy for concept demonstration projects or experimental projects, to be implemented in maritime area or in inland waters or for self-consumption or CER and, finally, establishment licenses and operation licenses for grid infrastructure (lines and branches, transformer stations, substations). 

Under the terms of the Order of the Secretary of State and for Energy, of 21 June, 2021, the deadlines for obtaining licenses for power plants referred to in Decree-Law No. 172/2006, of 23 August, as amended, were extended for a period of 10 months, pursuant to the provisions of article 15, no. 5 of mentioned Decree-law. Additionally, DGEG Order 16/DG/2021, of 2 July, determined the extension of the period for expiry of the registration provided for in subparagraph b) of paragraph 5 of article 27-B of the same Decree-Law, for another 10 months.

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.