Decision on CEZ licence in Bulgaria not expected before mid-June – regulator

Written by on April 12, 2013 in Bulgaria, Business, Europe - No comments

The head of Bulgaria’s State Energy and Water Regulatory Commission (SEWRC), Evgenia Haritonova, said on April 12 that a decision on whether to revoke the electricity distribution licence held by Czech firm CEZ in Bulgaria was unlikely to come before mid-June.

Speaking to reporters after a scheduled meeting of the regulator, Haritonova said that SEWRC planned to be very careful with the proceedings so as not to breach the law. She said that the commission planned to consult with the anti-trust regulator, the Interior Ministry and the Defense Ministry, as well as municipalities in western Bulgaria, where CEZ operates the electricity distribution grid.

“Whether it is CEZ or another electricity distribution company, it matters not, what is important is that it ensures the security of access to electricity in many districts and the state regulator cannot afford not to defend consumers’ interests and create chaos with its decision,” Haritonova was quoted as saying by Focus news agency.

The regulator is scheduled to meet next week to review whether CEZ has implemented the recommendations made by the regulator in February, when SEWRC opened the licence revocation proceedings.

The regulator started the process after a late-night meeting on February 19. Earlier that day, then-prime minister Boiko Borissov said that the regulator would revoke the licence by the end of the day – even though, by law, SEWRC is the only body that decide whether to do so or not.

Two days later, Borissov resigned and had his resignation accepted by parliament, after nationwide protests sparked by high electricity bills in January had briefly turned violent in Sofia. The same protests spurred a number of regulatory checks at Bulgaria’s three private electricity distribution companies, resulting in a number of fines against the companies.

Austria’s EVN and Czech Energo-Pro had been fined for violations, but it was CEZ that bore the brunt of SEWRC’s sanctions, with 21 fines issued against its subsidiaries.

The worst violations had to do with CEZ not calling public tenders (instead awarding contracts to its own subsidiaries), failure to turn in important paperwork related to meter replacements, as well as failure to answer regulatory queries on time, the regulator said.

Should CEZ lose its licence, existing regulations require authorities to appoint a special administrator that will provide the service in the meantime, but CEZ would retain ownership of its Bulgarian assets and the administrator would have no right to take on new debt or sell property.

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