Corina Popescu, Electrica CEO: “Investments are always an engine of evolution”

Recently appointed as CEO of the Electrica Group for a four-year term, Corina Popescu is the only Romanian, not to mention female, CEO in the field of electricity distribution and supply. She recently met with The Diplomat-Bucharest to share her multiply-unique point of view on the industry.

1. Your career has always been related to the Romanian energy sector. What are the challenges and the rewards for those working in this sector?

I am among those who have been fortunate enough to find their vocation as early as university, and I am happy to have built a career in a field that is very dear to me and to which I have been dedicated for my entire professional career.

It may sound like a cliché, but the truth is that, after all these years, I can say that the rewards have been as big as the challenges I have encountered. This is a complex and vital area for the world today, with a direct impact on the lives of each of us. There are endless scenarios – from the usual situations we face daily and the fact that client demands are increasing, to the challenges of an energy market that is looking for a new balance point, or to those of the ever-changing regulatory framework. It’s somewhat similar to a marathon race – you work a lot and it’s possible to encounter numerous obstacles until you reach the finish line. Satisfaction is huge considering we deliver, day by day, the energy for the Romanian people.

2. How do you see the evolution of the energy industry in 2019?

The experience of recent years shows us that the energy sector has faced major changes, some absolutely necessary, but others which will probably need to be improved because it is essential to learn from the mistakes of the past. In such a strategic field, we need predictability and long-term transparency, a strategy assumed by the entire political class.

2019 marks the beginning of a new regulatory period that brings many new issues. The key word should be flexibility, the willingness to find the best solutions, to quickly adapt to a world in constant transformation. We strongly believe that it is absolutely necessary to have a regulatory framework that will further stimulate investment – the engine for the evolution of the Romanian energy system. A sustainable and consistent investment level creates the foundation for improving distribution network performance, reducing technological losses, streamlining operational activities, all for the benefit of end-users. At the same time, identifying a balance between supportability of energy prices and ensuring security of energy supply is a challenge that needs to be analysed with priority.

3. How would you describe the company’s evolution in 2018 compared to the previous year?

The year 2018 was a fluctuating one if we look at the quarterly results, with the past three months being severely affected by the significant increase in the costs of purchasing electricity, especially in the regulated supply segment. Under the applicable provisions, the differences in acquisition costs unrecovered by 2018 prices will be recovered by 2022. Even in these circumstances, we ended the year with an individual net profit of 24 percent above the budgeted level and a consolidated net profit of 230 million RON, up 34.3 percent as compared to 2017.

It is worth mentioning the record investments made in 2018 in the distribution infrastructure, of almost 900 million RON, with the effect of increasing operational efficiency, as well as improving the quality of the energy distribution service.

The total operating revenues of the Electrica Group in 2018 amounted to 5.8 billion RON, a level similar to that of 2017. EBITDA of the Electrica Group amounted to 681 million RON, up 13.2 percent from 601 million RON in 2017.

4. What were the company’s most important achievements in 2018?

One of the main achievements of the Electrica Group in 2018 is the implementation of the most ambitious investment plan in the industry – nearly 900 million RON allocated for the rehabilitation and modernization of the distribution networks.

As far as the supply segment is concerned, we are continuing a comprehensive business reorganization project, moving from the position of energy vendor to that of integrated service provider. The first steps towards creating a multi-utility company have been made, as Electrica Furnizare already has a license for the supply of natural gas. It is an area that the company plans to develop in order to meet the expectations of its customers.

In response to the changes in the energy market, we continued our transformation program and optimised our distribution and service activities. This entails implementing a new organization model for the distribution segment, which has as its main benefit the increase of efficiency through the functional coordination of all the activities in the company. This increases the ability of companies to optimize their operations, to make investments and improve network access, and most importantly, to have better coordination of field activities.

At the same time, the company has stepped up its social responsibility projects and has carried out the third edition of the “Electrica puts Romania in another light” program, a program that enjoys a growing awareness and appreciation from the communities of which we are part.

5. What are the challenges for Electrica in 2019?

Legislative and regulatory changes in recent months are the main elements that can affect the energy market dynamics and the predictability climate, factors which are essential for the sustainable development of any company in the industry, especially a listed company. For example, a significant reduction in the regulated profitability rate and the introduction of a turnover tax are measures that slow down the pace of infrastructure investments.

We will continue the process of transformation and optimization in the distribution area and, in addition, we have already started a similar project in the supply area.

6. What are the main priorities for this year?

In 2019, the Electrica Group has the main objective of improving its portfolio of products and services, as well as meeting the needs and demands of the clients, both by developing new solutions and services, as well as by sustained investments in networks and technology.

We are considering the completion of the activities already undertaken to optimize the distribution companies with concrete actions in the supply and service area, as well as measures to improve the support functions. Also, from our desire to develop sustainable partnerships, besides traditional products, we aim to support the development of the gas segment and other solutions that bring value to the activities of our customers.

Even if the regulatory framework is not one that encourages investments, it remains a priority for the Electrica Group, as it has been in recent years. In 2019, Electrica will continue its ambitious investment plan in the distribution area. Compared to the minimum level of investment required by the regulator, Electrica has planned investments of over 43 percent more. We are talking about over 600 million RON commissioning investments at the level of the three distribution operators within the Group for the year 2019, investments that will improve the quality of the services we provide.

Last but not least, we will continue to invest in people and their development, in creating a strong team to support change in the context of an energy market that is facing more and more challenges.

About Corina Popescu

Georgeta Corina Popescu is a top executive with an impressive career in the energy sector. Appointed on 1 June 2018 as General Manager of Societatea de Distributie a Energiei Electrice Muntenia Nord, part of the Electrica Group, Popescu also took over the position of interim General Manager of Electrica SA from 1 November 2018.

As of 1 February 2019, Corina Popescu holds the position of General Manager of Electrica for the next four years.

Graduate of the Faculty of Power Engineering of the Polytechnic University of Bucharest, Electro energetics specialty, Popescu started her professional career in the Bucharest Power Distribution and Supply Branch. Since 2007, she has worked in the private sector, occupying important positions within the E.ON Romania Group and the OMV Group.

Between December 2015 and February 2017, Popescu held the position of Secretary of State in the Ministry of Energy, during which she was also a member of the Board of Directors of Electrica SA. On 1 May 2017, she was appointed to the Transelectrica Directorate, and between June 2017 and April 2018 she was the Chairman of the same group.

Electrica Group is a key player in the electricity distribution and supply market in Romania, as well as one of the most important players in the energy services sector.

Electrica Group provides services to over 3.8 million users and has national coverage with subsidiaries in three areas for electricity distribution: Transilvania Nord, Transilvania Sud, Muntenia Nord, and covers the entire country for electricity supply and for maintenance and energy services.

As of July 2014, Electrica has become a company with private majority capital, listed on the Bucharest and London stock exchanges. Electrica is the only listed Romanian company in the field of electricity distribution and supply in Romania.

(From the print edition)