Bulgaria state utility NEK debt at 2.9B leva, regulator says

Written by on June 26, 2014 in Business - Comments Off on Bulgaria state utility NEK debt at 2.9B leva, regulator says

Bulgaria’s state-owned electricity utility NEK has amassed 2.9 billion leva (about 1.48 billion euro) in debt, the head of Bulgaria’s State Energy and Water Regulatory Commission (SEWRC) Boyan Boev said on June 26.

Just over half of the figure, 1.5 billion leva, was from electricity-trading losses or, as Boev put it, “public delivery of electricity”.

Broken down, NEK lost 720 million leva from price differences of electricity from renewable energy sources, a further 382 million leva from losses incurred under the long-term electricity purchase contracts with two coal-powered plants owned by private US investors and 392 million leva from operating the Chaira pumped-storage hydro-power plant (used to balance the load of the power grid).

NEK also incurred debts of 1.4 billion leva from investment in the shelved Belene nuclear power plant and the Tsankov Kamuk hydro-power array.

The utility’s losses from electricity trading are subject to compensation through consumer electricity price increases, but investment losses are not, Boev said.

He said that it was impossible to predict when such a price hike would be carried out and how large it would be, but the regulator’s plans to cut electricity prices by about one per cent starting July 1 remained unchanged. Whenever the price hike does come, there would be no “sudden and drastic changes for the end consumers.”

The figures announced by the regulator were debts accrued since 2010, but SEWRC did not give a break-down by years – a relevant point, given that one of the major criticisms levelled at Bulgaria’s socialist-backed government is that it has leaned on the regulator to keep electricity prices low to prevent public discontent with its policies from spreading.

Boev has denied such charges, saying that SEWRC was an independent regulator, but his words have rung hollow with the government’s numerous critics, given that prior to his appointment to the regulator earlier this year, Boev had been the chief executive of the Bulgarian Energy Holding – the umbrella company for most state-owned energy companies, including NEK – a post to which he was appointed also by the current cabinet.

(Photo: greenhitma/sxc.hu)

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