Bulgaria’s electricity price hike row reaches Parliament

Written by on June 22, 2015 in Bulgaria - Comments Off on Bulgaria’s electricity price hike row reaches Parliament

The simmering opposition to plans by Bulgaria’s utilities regulator to increase electricity prices starting July 1 appears to have reached boiling point, with Parliament scheduled to hear out the regulator’s head on the House floor on June 24.

The Energy and Water Regulatory Commission (EWRC) proposal envisions prices rising by between 1.5 per cent and 3.6 per cent for household consumers, with the pushback coming mainly from industrial consumers operating on the liberalised electricity market.

One of the measures in the EWRC package envisions a sharp hike in the “social responsibility” fee paid by such consumers – a fee introduced in 2013 to replace renewable energy and power grid loss surcharges – from 18.9 leva/MWh to 40.2 leva/MWh. This increase would result in a 20 per cent hike in the electricity bills paid by industrial consumers, according to the estimates from the companies affected by it.

To reduce the impact of the hike, the Energy Ministry planned to introduce new regulations that would discount part of the “social responsibility” fee; thus, companies with annual consumption of more than 30GWh would pay a final fee of 21 leva. Reports quoting Energy Minister Temenouzhka Petkova said that the ministry was now considering expanding the scope of the regulations to cover companies with annual consumption of more than 2GWh (with the size of the discount depending on the annual electricity consumption of these companies).

EWRC’s proposal is opposed by Bulgaria’s largest employer groups, several of them announcing last week that their members would begin one-hour work stoppages (a tactic usually employed by trade unions) to protest against the increase.

Prime Minister Boiko Borissov has repeatedly said he was also opposed to the proposed hike, while also pointing out that he and his government could not interfere with the rulings of an independent regulator, such as EWRC.

Several other groups have spoken in favour of the proposal, including trade unions, the mining industry and trade groups such as AmCham.

EWRC chairperson Ivan Ivanov said on June 22 that the regulator would decide whether to postpone the hike by June 26 – it can do so after legislative changes in 2013 gave EWRC the option to change the regulatory framework more than once a year. Reports in Bulgarian media also claimed that Parliament’s committee that oversees the regulator would draft a bill of amendments that would postpone the proposed “social responsibility” fee hikes.

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