Western Bulgaria Faces 13% Electricity Price Hike

Business » ENERGY | February 28, 2011, Monday // 13:26
Western Bulgaria Faces 13% Electricity Price Hike: Western Bulgaria Faces 13% Electricity Price Hike Theft has inflicted losses of over BGN 17 M in 2010 for the Czech-owned power utility CEZ, servicing western Bulgaria. File photo

The Czech-owned power utility CEZ, providing electric power to western Bulgaria, is requesting a 13% price increase after July 1, 2011.

The request must be approved by the State Commission for Energy and Water Regulation, DKEVR. The approval would mean that the electric bill of a household in western Bulgaria will go up by BGN 5.5 a month on average

CEZ say the price increase takes into account real expenses, inflation, investments, market liberalization and energy effectiveness and is based on the price structure approved by DKEVR. The price is also formed on the principles of equality of all customers.

Since the beginning of the current regulatory period, DKEVR had estimated CEZ annual investments at BGN 35 per customer while in southeastern and northeastern Bulgaria, where the other two utilities operate, they are BGN 75 and BGN 65 respectively. CEZ say this unbalance is unacceptable because the company services the most customers – over 2 million and has the longest network of over 60 000 km.

40% of the population of the country lives in western Bulgaria where the capital Sofia is located, in addition to part of Bulgaria's top winter resorts, all forming a significant percentage of the Gross Domestic Product (GDP), CEZ point out.

The company explains the price increase is a must in order to generate the needed revenues of BGN 437 M, and optimization of customer service and prevention of theft will also be considered as reserve.

In the last year, theft has inflicted losses for CEZ of over BGN 17 M.

The CEZ proposal takes into consideration the need to solve the problem with the purchase of facilities built by third parties ASAP. The amount needed for it was BGN 120 M at the end of 2010.

The company also points out that 84% of all cables date from 30 years ago with a warranty period of 25. 41% of the air power lines are over 30 years old with a warranty period of 30 years.

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Tags: DKEVR, power utility, electric power, prices, electric bill, household, weastern Bulgaria, CEZ, investments, theft

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