Mihail Andonov, the newly appointed CEO of the Bulgarian Energy Holding (BEH) and former head of the National Electric Company (NEK), has insisted that the national power utility had solid reasons to change its Q2, 2012 price increase request from 4.5% to 15%.

At the end of 2011, NEK requested an increase of 4.5 in wholesale prices, while on Monday the figure spiraled to 15%.

In a Tuesday interview for Darik radio, Andonov argued that NEK had had four reasons to demand a 15% increase in electricity prices from July 01, including gas prices, renewable energy and the capacities of the AES Galabovo and Brikel thermal power plants.

The former CEO of NEK assured, however, that the price increase for end consumers would be about the "much-discussed 10%."

In early March, Angel Semerdzhiev, Chair of the State Commission for Energy and Water Regulation (DKEVR), declared that an increase of over 10% in power rates from July would not be allowed.

The DKEVR Chair added that power distributors had sought a 3-10% increase in their markup.

In his Tuesday interview, Andonov reminded that gas prices had already gone up twice during the ongoing regulatory period, which had triggered an increase in the electricity generated by the heating utilities.

Another reason for the higher price increase was the compensation shouldered by NEK related to the preferential prices of energy from renewable sources, Andonov clarified, adding that the production of renewable energy had gone up by over 20% throughout the regulatory period.

The former NEK CEO cited the launch of the AES Galabovo TPP as yet another factor for the requested 15% increase in power tariffs.

He explained that the launch of the facility had not been calculated into the price framework for the respective regulatory period.

The fourth reason presented by Andonov was the launch of the Brikel TPP on August 08, 2011 after the finalization of a desulfurization unit.

"NEK's demands have so far not been taken into consideration by the watchdog, so I do not expect that it will accept our proposal. This means, however, that NEK will continue to experience financial problems," the BEH CEO noted, adding that it would be up to the DKEVR Chair to solve the problem.

Andonov confirmed plans for trading 10-25% of BEH on the stock market.

"As regards the privatization of some of the companies, I have no information at this stage and I cannot comment," he stated.

He added that the issue of taking the Belene NPP project off the list of NEK assets would become clear once the fate of Bulgaria's second nuclear plant was decided conclusively.

Andonov was appointed CEO of BEH on Sunday after Yordan Georgiev was removed from the post.

BEH comprises Bulgaria's largest state-owned energy assets, including the Kozloduy NPP, Bulgargaz, Bulgartransgaz, NEK, etc.

BEH also represents Bulgaria in the South Stream and Nabucco gas pipeline projects.

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