Certainly!

GEO 119/2022 is a Romanian Government Emergency Ordinance that was published on

March 9, 2022. Here is a brief summary of its key provisions:

The ordinance introduces new regulations for the capitalization of technological losses for distribution
system operators (DSOs) in the energy sector. Under the new rules, DSOs are allowed to capitalize these
losses, which will provide a more accurate reflection of the value of the distribution systems they
operate.

The ordinance establishes new criteria for determining the quality of natural gas, and requires gas
suppliers to ensure that the gas they provide meets these quality standards. The aim of this provision is
to improve the safety and reliability of natural gas distribution networks.

The ordinance introduces new rules for the certification of energy efficiency auditors, and establishes a
new register for accredited auditors. This is intended to improve the quality and reliability of energy
efficiency audits, and to ensure that auditors meet certain professional standards.

The ordinance also amends several existing laws related to energy regulation, including the Energy Law
and the Law on Electricity and Natural Gas. These amendments are intended to improve the functioning
of the energy market in Romania, and to ensure that it operates in a transparent and efficient manner.

Overall, the main goal of GEO 119/2022 is to modernize and streamline the regulatory framework for
the energy sector in Romania, and to promote greater efficiency, transparency, and sustainability in this
important industry.

User

Please provide more details regarding capitalization of technological losses

ChatGPT

Certainly, I'd be happy to provide more details about the capitalization of technological losses under
GEO 119/2022 in Romania.
Technological losses refer to the losses that occur during the process of transmitting and distributing
electricity. These losses can occur due to various factors such as resistance in wires and transformers, as
well as other technical factors related to the distribution system. These losses are often unavoidable,
and they represent a significant cost for distribution system operators (DSOs).

Under the previous accounting rules, DSOs in Romania were required to recognize technological losses
as an expense in their financial statements. However, the new regulations introduced by GEO 119/2022
allow DSOs to capitalize these losses as an asset, which means that they can be included in the value of
the distribution system.

Capitalizing technological losses has several benefits for DSOs. Firstly, it provides a more accurate
reflection of the value of the distribution system, as it takes into account the fact that the system will
inevitably experience some losses. Secondly, it can help to reduce the volatility of DSOs' financial
statements, as expenses related to technological losses can vary significantly from year to year. Finally,
capitalizing technological losses can also help to improve DSOs' creditworthiness, as it increases the
value of their assets.

It's important to note that the capitalization of technological losses is subject to certain conditions under
GEO 119/2022. For example, DSOs are required to demonstrate that the losses are technically justified
and that they have made efforts to reduce them. In addition, the capitalization of technological losses
must be consistent with international accounting standards and the guidelines issued by the Romanian
National Energy Regulatory Authority (ANRE).