Termoelectrica's S.A. specialists and representatives of the housing sector in Chisinau met on January 25th in a public debate to discuss the rescheduling of historical debt for heating and the modernization of district heating services for the residential sector. While S.A. "Termoelectrica" invests in energy efficiency projects, housing fund managers remain swallowed by debts and obligations to public service providers.

"More than 80% of residential blocks in Chisinau work in obsolete legal forms. The reorganization process is blocked by the fact that those who initiate the reorganization process are required to take over the historical debts of the block, which were previously not billed and unknown. In this case, the historical debts of the housing sector to S.A. "Termocom" must be frozen in order not to block the reorganization of the legal entities that are currently managing the housing sector in condominium owners associations”, believes Victor Parlicov, an energy expert at IDIS "Viitorul".

Thus, over 26 years, the debts to S.A. "Termoelectrica" have grown, and the residential fund is an absolute leader in this chapter, accounting for 98% of total historical debts. Also, by the end of 2017, the thermal energy provider "Termoelectrica" had debts of about three billion lei to the gas supplier "Moldovagaz".

"Administrators see solving the problem by debiting the debts, but they do not see the solution for collecting these debts, which, in fact, is their duty. Everyone tries to hide behind certain rights, but no one wants to recognize their contractual obligations and according to the statutes. We have contracts expressing who consumers are and what is the billing procedure. There are associates who pay directly to Termoelectrica. We support HOAs administrators and we have a total openness", says Commercial Manager of SA" Termoelectrica", Victor Puiu.

In turn, HOAs managers do not understand where the debt comes from.

According to Victor Cojocaru, president of the housing cooperative no.185, the debts are endless and continue for years. "Because of the low incomes of the population, we require payment for heating to be made by 1 October. Unfortunately, now the sums paid in summer are not taken into account. We have to end these problems and calculate the debts of the last three years. But the state should think about the citizens who have poor pensions of 620 lei".

"We have to ask who those debts are. What is the real duty? While the tenants are the final consumers, they should pay them and not the tenants' associations because we have no liability to Termoelectrica. Let us collaborate to eliminate these debts once and for all", suggests Alla Poltavcenco, manager of APLP 51/173.

One of the solutions proposed in the debate is the horizontal distribution of heat, which will reduce the cost of heat. The solution allows for individual consumption control and offers the possibility to count each apartment individually. "The housing blocks with such a system have bill savings of over 30%, compared to the average cost of heat in the town. For example, in the 2016-2017 season, the cost difference between the block on Pandurilor street and the other blocks in the capital was 51.75%. There are 28 apartments in this block, and the average expenses for each tenant were 1,000 euro", says Nicolae Glingean, development director at SA" Termoelectrica". According to the company, from the installation of the horizontal distribution now benefits the block from Gradinilor Street,  following the example of the 52 block Pandurilor Street - the first block in the capital that passed last year from the old distribution system to the new one.

Energy efficiency works can only be made entirely at the level of the building and not for each apartment. Respectively, even if all the administrative and legal problems were solved, the economic problem would remain - the vulnerable social population would have no sources to pay for their contribution to these energy efficiency works. "If we admit that about 10% of the apartments in each block are inhabited by socially vulnerable consumers, then the 60 million lei allocated for compensators could mobilize up to 600 million lei for investments in the energy efficiency of the buildings", says Victor Parlicov.

At the same time, the energy expert Sergiu Ungureanu proposes the liberalization of the energy market and the direct contracting "We have to take into consideration the direct contracting, attract investors and change the legislative framework. We need to liberalize the supply market and find other sources of energy production. Termoelectrica also has to raise its defense shield and work with consumers".

The "Termoelectrica" company provides with the thermal agent, in the cold period of the year, over 186 thousand apartments in Chisinau.

The event was held within the initiative 'Improving energy efficiency program for low-income families in Moldova", implemented by the Institute for Development and Social Initiatives (IDIS) "Viitorul" with the financial support of World Jewish Relief Foundation. It aims to raise the standard of living of low-income tenant families by improving energy efficiency measures that significantly reduce the heating costs and consumption.

For more information, please contact Ana – Maria Veverita on ana.veverita@viitorul.org or (0 22) 221844.

Termoelectrica and the representatives of the housing sector in Chisinau met on September 12th in a public debate to discuss solutions to overcome the debts by homeowners associations. While S.A. "Thermoelectric" invests in energy efficiency projects, housing fund managers remain swallowed by debts and obligations to public service providers.

"Heat tariffs have not been adjusted from 2001 to 2007, and in 2008 there was the first increase in tariffs and immediately compensations were introduced for the cold season. From 2011 to 2015, the heat tariffs were adjusted by ANRE four times, and during this time, there was a problem of recovering money from consumers who did not have the ability to pay the invoices at the increased rates. And in 2015, when Termoelectrica was created, new problems arose - the old issues related to the debts accumulated by Termocom remained unresolved and the situation became more strained between the heat supplier and the housing fund manager", said Victor Parlicov, an energy expert at IDIS "Viitorul".

Thus, over 26 years, the debts to S.A. "Termoelectrica" have grown, and the residential fund is an absolute leader in this chapter, accounting for 98% of total historical debts.

"Debts are formed because of defaulted consumers and then the HOA manager is in a bad situation. Out of the three thousand controlled apartments this year (out of 26 thousand), we identified 117 cases of theft: de facto the consumer was connected to the centralized heating and de jure used the autonomous boiler. There is still a problem of the housing stock management. We would be very pleased to contact the consumers directly, but they will have to respect some obligations”, believes the director of S.A "Termoelectrica”, Veaceslav Eni.

In turn, housing fund managers claim that they are sued despite paying bills in advance and not understanding where the debt arises.

According to Victor Cojocaru, president of the housing cooperative no.185, S.A. "Termoelectrica" provider tries to put the historical debts on the consumer's shoulders. "Every three years, the provider attacks the CCL in court, asking us to pay various fees, and the bailiff's services, blocks the bank account without accepting the rescheduling of debt for a period of time determined by both parties".

"Debts are formed not only from heating, but also from water. Counters that have recently been checked do not work properly. As managers, we are intermediaries and we buy gcal and sell it to tenants. It turns out we work for Termoelectrica for free, but the institution applies penalties", believes Alla Poltavcenco, manager of APLP 51/173.

Energy expert, Sergiu Tofilat explains how the debt is accumulating and what solutions would be appropriate: "Legislation provides that the difference from the common hot water meter and the individual meters is shared between the consumer, but often this difference is paid by those who indicate the real consumption. The "Apa-Canal Chisinau" collects these debts from IMFGL, and the Termoelectrica does not allow this because of the payment of gas to Moldovagaz. Or, the methodology is crooked and we have to address the Government or the problem of managing the housing sector, and in this respect, the local government needs to get acquainted with Termolectrica to take on these debts".

Also, at the time of the tenants 'decision to reorganize as co-owners' associations, Termoelectrica forces the managers of the associations to recognize these debts and take them through concession to his management.

The debts previously invoiced to the tenants are not a problem because there are the invoices sent to the tenants and the collection of the necessary funds to pay off the debt. While unvarnished debts have a limited prescription, so forced enforcement of these debts is virtually impossible. But at the same time, the tenants refuse to continue the registration process if, as a result of this reorganization, they will have to pay several hundred thousand extra lei. Thus, these debts become an important barrier to reorganizing the old residential blocks into the condominium association.

"We are attending different meetings trying to explain to people what APLP or condominium means, but we do not have the majority of 2/3 needed for reorganization. We are helping the HOAs managers with legal support, but unfortunately, in 17 years, only ten tenant associations have been reorganized because they fear the burden of debs”, says Sergiu Negru from the Chisinau Town Hall.

Among the solutions recommended in the case of the debate for diminishing this situation, we can mention the conclusion of a tripartite contract between the consumer, the manager of the housing stock and S.A. "Termoelectrica", the modification of the normative acts regarding the allocation of the hot water consumption.

Find more in the Conclusions and recommendations of the public debate.

The event was held within the initiative 'Improving energy efficiency program for low-income families in Moldova", implemented by the Institute for Development and Social Initiatives (IDIS) "Viitorul" with the financial support of World Jewish Relief Foundation. It aims to raise the standard of living of low-income tenant families by improving energy efficiency measures that significantly reduce the heating costs and consumption.

For more information, please contact Ana – Maria Veverita on ana.veverita@viitorul.org or (0 22) 221844.