Bulgaria Launches 5 Criminal Proceedings in Energy Sector

Business » ENERGY | April 3, 2013, Wednesday // 13:15
Bulgaria Launches 5 Criminal Proceedings in Energy Sector: Bulgaria Launches 5 Criminal Proceedings in Energy Sector The probe in the energy sector was ordered by Bulgaria's Chief Prosecutor Sotir Tsatsarov. Photo by BGNES

Bulgaria's National Electric Company, has committed a number of breaches, mostly related to the production of excessive quantities of electric power, the prosecution probe has concluded.

The probe of the National Electric Company, NEK, the State Commission for Energy and Water Regulation, DKEVR, and the three power distributors – CEZ, EVN, and Energo-Pro was launched in the aftermath of mass protests in the country against high utility bills that turned to civil unrest and led to the resignation of Prime Minister, Boyko Borisov, and the Cabinet of his Citizens for European Development of Bulgaria party, GERB.

Prosecutor, Borislav Dzambazov, stated at an emergency press conference Wednesday that NEK had improperly committed to purchase 100% of the produced electric power regardless of the market demand.

According to the prosecutor, there is evidence senior NEK employees have acted in premeditation in contracting unfavorable clauses, something that would require a pre-trail proceedings.

His team has probed NEK, and the Maritza Iztok 1 and 3 Thermal Power Plants, on a tipoff of now-former Economy and Energy Minister, Delyan Dobrev.

The probe has further established that the method of forming electric power prices has led to their increase by 10% to 25% in the course of several years and NEK now purchases electricity at prices higher than the permissible threshold.

Dzhambazov noted a subsequent abolition of these contracts would trigger huge losses for NEK.

Speaking at the special press conference, Deputy Chief Prosecutor, Kamen Mihov, said that in addition to NEK's breaches, DKEVR has been found to be a very ineffective watchdog.

DKEVR's breaches include failure to issue sanctions for violations in calculations of monthly electric bills, lack of control on expenditures, and inactivity in applying its authority to revoke licenses of power distributors.

"DKEVR is yet to issue a single sanction against power distributors, despite our recommendations," Mihov stressed.

It further emerged at the press conference that the prosecution has launched a total of five pre-trial proceedings for breaches of DKEVR, CEZ, NEK, and the Bulgarian Energy Holding, BEH.

One of the most blatant of these violation was the State failing to collect its dividends from CEZ, which equal 33% of the utility's profits totaling BGN 593 M in 2011 – 2012.

The representative of the Economy and Energy Ministry at CEZ will be held responsible.

Four of the proceedings are against an unknown perpetrator while the fifth is against the CEO of NEK and BEH, Mihail Andonov, on charges he had sealed contracts knowing they would inflict losses for the State.

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Tags: Economy and Energy Minister, Delyan Dobrev, Chief Prosecutor, Sotir Tsatsarov, collaterals, contracts, electric power, purchase, consumers, electric bills, NEK, Energo-Pro, EVN, CEZ, Sotir Tsatsarov, Chief Prosecutor, protests, electricity prices, State Commission for Energy and Water Regulation, DKEVR, tax officials, Boyko Borisov, GERB, Nikolay Kokinov, Kamen Mihov, Borislav Dzambazov, BEH, Bulgarian Energy Holding, National Electric Company, Maritza Iztok, TPPs, thermal power plants

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