Ahead of elections, Bulgarian politicians make power play over electricity price increase

Written by on September 29, 2014 in Perspectives - Comments Off on Ahead of elections, Bulgarian politicians make power play over electricity price increase

It is high time for an end to using energy issues for political purposes, the head of Bulgaria’s energy regulator said on September 29. With the regulator due to announce electricity price increases just a few days before early elections, it is a faint hope.

It should be left to the next government to allow matters to be decided on a purely technical and economic basis, Svetla Todorova, head of the State Energy and Water Regulatory Commission, said.

Todorova was appointed head of the regulator on September 3 by the caretaker cabinet.

Her appointment followed the year and a few months in which the Bulgarian Socialist Party-Movement for Rights and Freedoms ruling axis was in power, during which time the regulator – under its then-head – lowered electricity prices in moves that critics saw as populist and short-sighted.

Electricity prices were the issue around which February 2013 protests were mobilised against the-then government headed by centre-right GERB party leader Boiko Borissov.

Ahead of Bulgaria’s October 5 early national parliamentary elections, called after the demise of the BSP-MRF government that fell apart under pressure from the BSP’s rout in May 2014 European Parliament elections, and against a background of months of widely-supported anti-government protests, electricity is a key electoral issue, along with other hot-button issues such as what to do about Corporate Commercial Bank.

With the regulator already having signalled that a significant adjustment to electricity prices is likely, and with polls suggested that Borissov’s GERB is set to win the most votes on October 5, left-wing and populist parties are seizing on the energy issue.

This is in spite of the regulator and Bulgaria’s caretaker economy minister arguing that electricity price hikes are unavoidable given the state of the energy sector, along with caretaker Deputy Prime Minister Ekaterina Zaharieva arguing that the adjustments are hardly increases, given how the electricity price was pushed down last year.

Speaking on television on September 29, the day before the regulator is due to make a final decision on electricity prices, Todorova said that fixing the deficits in the system could mean an electricity price hike of 50 per cent, but 10 per cent was the limit that was socially tolerable.

Todorova, who at a public hearing on electricity prices last week was pelted with eggs by one of those associated with people from the February 2013 protests, said that the incident perhaps had been organised in advance and she took it not as a personal attack but as an outpouring of emotions.

Dialogue about electricity prices should be conducted in a different way, not involving the throwing of eggs, she said.

Todorova said that the commission had planned to wait for a couple of months before adopting a change of the electricity price, so as to carry out an overall analysis of the companies, but eventually decided to act faster. She added that there would still be a serious analysis.

“We made an expert analysis of the National Electricity Company (NEK) – the results are tragic. The pace which the state of the company is worsening is highly worrying,” Todorova said, adding that the distribution companies would be subject to a thorough analysis as well.

For all Todorova’s appeal not to politicise the issue and to have a debate based on rational criteria, Bulgarian politicians – notably those unlikely to be in government after October 5 – were in a rush to talk about the topic.

Bulgarian Socialist Party parliamentary candidate Maya Manolova said on September 29 that if the following day, the regulator did not “comply with the opinion of the people” there would be further protests.

Manolova, whose party is seen in polls as set for a distant second place on October 5, said that it was clear there were problems in the energy system and “it was known where they come from” – and hardly surprisingly, in Manolova’s view, this was the GERB government.

She said that according to the unions, a 10 per cent increase in the electricity price would mean 190 leva higher bills for a family of four, “amounts that people cannot pay and therefore tension among people is enormous”.

Manolova blamed the caretaker cabinet, behind which – she said – was President Plevneliev and “behind them all”, Borissov, who was looking for “simplest solution, to shift the burden on to the end user, the poor Bulgarians who will have to fill the coffers of energy distributors and solar plants”.

Valeri Simeonov, co-leader of the ultra-nationalist Patriotic Front coalition, seen by some polls as having a chance of seats in the next parliament, said that the timing of the electricity price increase had been carefully selected so that it would happen during the time of the caretaker cabinet rather than the party that expected to be the majority in parliament, GERB.

In the view of Simeonov, the electricity price should go not up but down.

“An urgent analysis has to be made of the revenues and expenditures of the ‘major players’ in forming the electricity tariff.

“Then the big disproportions and discrepancies concerning the investments on the one hand of the producers mainly and the revenues [and] profits realised under the long-term agreements inked with the state, at that inked individually will be seen. Then it will be seen that actually the electricity price should not be increased but should be decreased as there are many reserves and the reserves come namely from the profits of the big thieves in the sector, Simeonov said.

Another who offered the view that electricity prices should be able to be brought down was Nikolai Barekov, leader of the populist Bulgaria Without Censorship movement, also seen by some polls as having a chance of a minority share of seats in the next National Assembly.

Barekov said on September 29 that the regulator should be closed and replaced by a new body made up of trade unions, business organisations and NGOs. He further promised a check of the energy sector “so that the guilty ones can be prosecuted”.

“If the EU allows the breaking of contracts with the energy supply companies and they are removed from the market together with the rest of the measures which we are foreseeing then the price of the electricity will be lowered by 20 per cent in 2015,” Barekov said.

These statements by politicians such as Manolova, Simeonov and Barekov are hardly the only ones they or other parties and politicians have made as the electricity price revision process runs in parallel with the election campaign.
But given that electricity prices are a key cost-of-living issue for Bulgarians being called to the polls on October 5, it is a certainty that after the energy regulator makes its announcement on September 30, political reaction will be vociferous as parties turn up the voltage on their complaints and promises. Todorova’s appeal for the debate to be de-politicised is set for a short-circuit.

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About the Author

Clive Leviev-Sawyer is the Publisher and Editor-in-Chief of The Sofia Globe. He is the author of the book Bulgaria: Politics and Protests in the 21st Century (Riva Publishers, 2015).