Bulgarian Energy Holding Denies Irregularities in Electricity Liberalization

Mihail Andonov, CEO of the Bulgarian Energy Holding (BEH), has vowed to present to the European Commission information about the measures taken over the past few months to achieve electricity market liberalization.

Andonov, as cited by the Bulgarian National Radio (BNR), explained Tuesday that BEH would submit the information in the hope that Brussels will conclude that there are no violations.

Andonov's statement came one day after the European Commission announced it had opened formal proceedings to investigate whether BEH is abusing its dominant market position in the wholesale electricity market in Bulgaria.

In a statement published Monday, the EC expressed concerns about BEH be hindering competition on wholesale electricity markets in Bulgaria and neighboring Member States through territorial restrictions.

In his Tuesday interview, Andonov admitted he was slightly worried by the fact that the proceedings had been launched as a priority measure under the case, rather than on the basis of identified irregularities.

The CEO of BEH specified that the EC was investigating the period 2007 – June 2012.

Andonov claimed that he had achieved a substantial increase in transparency in BEH's operations since he took office in end-March.

"Things are going in the right direction and I believe that the European Commission will find that any mistakes made in the five-year period have been removed and the EC requirements are fully observed," BEH's CEO insisted.

Andonov claimed that BEH had taken steps to comply with EC requirements six or seven months ago, adding that BEH companies trading in electricity, including the Kozloduy Nuclear Power Plant, the Maritsa Iztok 2 Thermal Power Plant, and the National Electric Company (NEK), had prepared rules for electricity trade, which they had published on their websites, and had conducted the procedures set out in the papers in 2012.

He said that the rules drafted by the electricity trading companies within BEH were in line with the EU's third energy liberalization package for gas and electricity markets.

Andonov reminded that the spin-off procedures for the division of NEK from the Electricity System Operator were underway, as required by the EC.

He added that all contracts concerning electricity production and supplies to the market were supposed to meet EC requirements after the completion of the spinoff.

The CEO of BEH suggested that the spinoff would be wrapped up in February or March 2013.