Sofia mayor asks prosecutors to investigate heating utility

Written by on March 8, 2013 in Bulgaria, Business, News - No comments

Sofia mayor Yordanka Fandukova has asked police and prosecutors to investigate why the city’s heating utility, Toplofikatsiya Sofia, did not seek to collect debts owed to the company.

The city hall was auditing the company, she said. Initially, the audit was due to cover only 2012, but it was expanded to cover previous years, she said.

Last week, Sofia municipal council decided to write off debts and interest owed by Toplofikatsiya customers beyond the three year statute of limitations, as required by court order.

In total, it is expected that the utility company will have to write off between 80 million leva and 90 million leva, a blow to the company’s already precarious financial standings – Toplofikatsiya already owes its main supplier, state-owned gas company Bulgargaz, about 160 million leva.

“Toplofikatsiya had tens of cases in court, which it kept losing, which also cost the company money. This is pointless. The revenues they projected were actually uncollectable and it was important to clear that money off the books,” Fandukova was quoted as saying.

“But it is reasonable for the customers who do pay on time to wonder whether they should not stop paying either, because otherwise the situation is unfair,” she said.

This was the latest statement from the city hall on the issue of utility bills. Last week, the city council voted to require the utility company to amend its terms of service and stop charging interest on the monthly bills handed to its customers. The measure was presented as the first of a package that is meant to prevent high heating prices and make it easier for consumers to pay their bills.

The city council also voted to task Toplofikatsiya’s board of directors to draft a plan with incentives for customers who pay their bills on time, as well as draft a framework settlement proposal to be offered to the utility’s customers with overdue payments.

Fandukova once again re-iterated the city hall’s intention to prevent the utility from billing customers based on its own estimates of consumption. That would require a change in the Economy and Energy Ministry’s regulations, she said.

Normally, Toplofikatsiya Sofia checks the meters once a year – at the end of the heating season, to record actual consumption. The monthly bills are just rough company estimates based on the same period of the previous year; after the meters are checked, the utility issues a “balancing bill”, which shows the additional amounts owed or whether the customers overpaid and are owed money by Toplofikatsiya.

(Photo: jaime06492/sxc.hu)

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