Bulgarian Energy Watchdog to Cancel Permits of Power Distributors

Business » ENERGY | March 19, 2014, Wednesday // 15:33
Bulgaria: Bulgarian Energy Watchdog to Cancel Permits of Power Distributors Photo by BGNES

Bulgaria's energy watchdog DKEVR has launched a procedure to suspend the license of power distributors in the country.

The State Commission for Water and Energy Regulation (what the abbreviation "DKEVR" stands for) is to terminate permits of EVN Bulgaria, CEZ Electro Bulgaria and Energo-PRO, officials have announced, citing "threats to energy security" as a reason.

DKEVR announced that the actions of power distributors "deprive [National Electric Company] NEK of the funds it needs to fulfill its license activity. This leads to a virtual standstill of overall activity at NEK and makes it impossible for the company to make payments to energy producers. Owing to this, security of energy supplies within the system is under threat," Bulgarian television bTV has reported.

Earlier, the National Electric Company (NEK) filed a complaint against the distributors over their delayed payments to the company, a claim the distributors themselves refute by saying they have no debts to NEK and it even owes them compensations for uncollected renewable energy taxes. They have even demanded that electricity prices go up so that they can re-balance their budget.

On Wednesday, NEK was reported as claiming debts of power distributors have reached BGN 347.6M, whereas the sum amounted to BGN 318M on Tuesday.

EVN, CEZ and Energo-PRO now have a seven-day deadline at their disposal to deliver on their debts to the state company, an option deemed unlikely by experts as it would lead the three distributors to a default.

The issue is to be discussed again at a DKEVR meeting on April 7, Dnevnik.bg has reported. Economy Minister Dragomir Stoynev hinted earlier that the state could step into the management of power distributors, but added this would not be tantamount to nationalization.

Over the last few days, media reports have suggested that NEK is in a state of technical default due to an artificial lowering of electricity prices.

The ruling Bulgarian Socialist Party has declared the ongoing dispute would not affect current electricity bills, a claim disputed by the opposition.

Yavor Kuyumdzhiev, a socialist MP, even asserted that the government would "do its best" to avoid increases in power price.

Expert opinions are also divided, with some claiming that a price hike will be obligatory to prevent the energy system from crumbling.

It was precisely high electricity bills that caused nationwide protests in Bulgaria in February 2013, leading to the resignation of then-ruling GERB's government.

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Tags: power distributors, NEK, DKEVR, renewable energy, Dragomir Stoynev
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