Bulgaria’s new electricity prices still facing opposition

Written by on August 3, 2015 in Bulgaria - Comments Off on Bulgaria’s new electricity prices still facing opposition

Bulgaria’s largest employer organisations have threatened to hold new protests in September, with the support of trade unions, should the new electricity prices that went into force on August 1 remain as they are.

At a joint news conference, the four largest employer groups and the two major trade unions in the country renewed their calls for “an energy reform roadmap” – without specifying further details, other than an immediate moratorium on linking any new renewable energy producers to the power grid.

The main objection voiced by industrial consumers remains the increase in the “social responsibility” fee, introduced in 2013 to replace renewable energy and power grid loss surcharges, which doubled to 38 leva for MW/h.

The increased fee would result in higher prices on consumer goods, declining exports, staff redundancies and declining income, according to the opponents of the new pricing formula put in place by the Energy and Water Regulatory Commission.

But Prime Minister Boiko Borissov dismissed the warnings as overblown. “We have already cut their prices before and I haven’t seen anything become cheaper. Nothing will increase, the market regulates the prices,” Borissov said during a visit to the town of Sliven on August 2.

This represented a shift in tone from Borissov, who took the industrial consumers’ side a month earlier, asking EWRC to postpone the price hike by one month, to allow the Cabinet and Parliament to come up with mechanisms to diminish the impact of the new pricing formula. These include a new state fund to which electricity producers and importers will pay five per cent of their revenues each month, under amendments passed last month by MPs, as well as planned government regulations to give industrial consumers a rebate that will vary depending on how much electricity they consume.

Borissov blamed his predecessors in office – the now-departed Plamen Oresharski administration – for the high annual deficits at state electricity utility NEK, which the new price formula are meant to eliminate. The deficits are a direct consequence of the sharp increase in renewable energy capacity, with NEK required by law to buy electricity produced from renewable energy sources at higher prices.

(Such deficits date back to before Oresharski took office in 2013, with the utility regulator trying repeatedly to balance out NEK’s books during Borissov’s previous administration, but never successfully so.)

Meanwhile, EWRC chief Ivan Ivanov once again dismissed the calls for his resignation, saying that the regulator’s decisions were “transparent, just and public”, as quoted by Bulgarian National Radio on August 3. Ivanov described the effort of industrial consumers to fight against the changed price formula as “defending its interests in a brutal and shameless way.”

(Photo: Clive Leviev-Sawyer)

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