Bulgarian regulator mulls massive fines on electricity distribution firms

Written by on May 14, 2014 in Bulgaria - Comments Off on Bulgarian regulator mulls massive fines on electricity distribution firms

Bulgaria’s State Energy and Water Regulatory Commission (SEWRC) said on May 14 that its audit of three privately-owned electricity distribution companies found 2690 violations, estimating that it could impose cumulative fines of at least 50 million leva (about 25.6 million euro) on the companies.

The bulk of the violations concerned billing “irregularities” following changes of electricity meters and instances of offering substandard service, namely supplying consumers with electricity at voltage below or above the value stipulated by law, SEWRC said.

The audit covered the period between 2008 and 2012. During that time frame, the companies saved 818 million leva, but instead of declaring those funds as profits, the money was spent on consultancy contracts and other tenders awarded to their own subsidiaries, SEWRC chairperson Boyan Boev told reporters.

Boev calculated the total fines that the three companies – owned by Czech CEZ and Energo-Pro, as well as Austria’s EVN – could be facing by multiplying the number of violations by the smallest fine that the regulator can impose, namely 20 000 leva. The maximum size for each fine is one million leva.

“You can make the calculations yourself, if we impose the lowest fine, this means at least 50 million leva for the three companies, but the final figure will be higher because it will depend on the severity of each violation,” Boev was quoted as saying.

He said that SEWRC will issue separate fines for each violation by late June. The electricity companies can present their objections to each fine within a three-day period after SEWRC’s decision and can also appeal them in court.

Boev declined to comment whether the regulator plans to launch proceedings to repeal the grid operator licences held by the three companies. CEZ, Energo-Pro and EVN electricity trading subsidiaries are already the targets of such proceedings, stemming from their commercial dispute with state electricity utility NEK.

Boev, who was head of the Bulgarian Energy Holding, the umbrella structure grouping the state assets in the energy sector, including NEK, denied the accusations that the regulator’s actions were politically motivated or were part of the ruling axis’s campaign to drum up support ahead of the European Parliament election on May 25.

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