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Meet the Law | Exceptional Measures for the Energy Sector associated with the COVID-19 Pandemic

In view of the global public health emergency and the national state of emergency, the following exceptional measures in the Energy Sector associated with the COVID-19 pandemic were approved:

Legal consumer protection measures
(Law No. 7/2020, of April 10)

This law determines that, during the state of emergency and in the following month, the suspension of the supply of electricity and natural gas, as essential services, is not allowed.

In the event of outstanding amounts, a payment plan must be prepared, in agreement between the supplier and the customer, to begin in the second month after the state of emergency.

This law came into force on April 11 and is available here.

The measures provided for in this law follow and have a partially coinciding meaning with the measures taken by the Energy Services Regulatory Entity (ERSE), through Regulation no. 255-A / 2020, of 18 March, which have recently been extended and revised by Regulation No. 356-A / 2020, of April 8, referred to below.

Regulatory measures to protect consumers and operators
(Regulation 356-A / 2020, of April 8, of ERSE)

Through this regulation, ERSE extended, until June 30, 2020, the validity period of Regulation no. 255-A / 2020, which approved a series of consumer protection measures against the public health emergency generated by the epidemiological threat of COVID-19.

Among the exceptional measures approved by Regulation no. 255-A / 2020 and which are now in force for this extended period we summarize the following:

  • The extension, by 30 days, of the notice period for the suspension of the supply of electricity at standard low voltage and natural gas to customers at low pressure with annual consumption equal to or less than 10 000 m3 (and also of piped LPG intended for domestic consumption), except in cases where this is necessary to safeguard the safety of people and goods;
  • The possibility for consumers to request the payment in instalments of the debts generated due to the aforementioned moratorium, without interest on late payment;
  • A moratorium on payments due by suppliers to network operators and the system manager, in the part responding to the amounts they receive late from their customers through the extension of payment terms.

Regulation No. 356-A / 2020, now approved, also serves two other purposes.

First, it implements the consumer protection rules defined in Regulation no. 255-A / 2020, providing, for example, the possibility for the fractional payment of electricity and natural gas bills to take up to 12 monthly payments.

Secondly, it establishes protection rules for other companies and operators in the sector, establishing, namely:

  • The possibility for consumers in a business crisis situation to reduce electricity and natural gas costs, namely the contracted power and the fixed term;
  • The possibility for small suppliers suffering from billing losses of at least 40% to benefit of a moratorium on the payment of network access fees;
  • The possibility for small suppliers suffering from billing losses of at least 40% to benefit of a moratorium on the payment of network access fees;
  • Extension of a series of deadlines regarding the obligations of regulated operators and regulatory reporting.

This law came into force on April 9 (with the exception of the rules relating to the fractional payment to final customers, which take effect from March 13), and is available here.

Reduction of regulated electricity sales tariffs to end customers
Directive No. 5-A / 2020, of 2 April (ERSE)

Through this directive, ERSE reduced the regulated tariffs for the sale of electricity to final customers from € 58.45 / MWh to € 44.77 / MWh, as a result of the reduction in the electricity purchase price in the wholesale market compared to the estimated at the beginning of the year.

This provision came into force on April 7 and is available here.

Authors

Picture of Monica Pacheco
Mónica Carneiro Pacheco
Partner
Lisbon
Picture of Bernardo Cunha Ferreira
Bernardo Cunha Ferreira
Associate
Lisbon
Picture of Duarte Lacerda
Duarte Lacerda
Associate
Lisbon
Guilherme_Teixeira
Guilherme da Fonseca Teixeira
Associate
Lisbon
Joao Marque Mendes
João Marques Mendes
Rita Guimarães Neto
Rita Guimarães Neto
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