Bulgaria’s Economy Ministry said on August 28 that the head of the country’s State Energy and Water Regulatory Commission (SEWRC), Boyan Boev, agreed to tender his resignation, as demanded a day earlier by the caretaker cabinet.
The announcement caused some surprise, given that SEWRC said earlier in the day that “there are no circumstances that would require any change in the membership of the SEWRC before the real positive effect of the decisions taken by the commission’s current line-up can be assessed.”
The ministry said in a statement that Boev agreed to resign after meeting with caretaker Economy Minister Vassil Shtonov, as has Boev’s deputy Lilyana Mladenova.
The third member of the regulator whose resignation was asked for, Elenko Bozhkov, was still considering whether to resign, reports in Bulgarian media said. If he does not, he could be sacked by the caretaker cabinet, with the ministry saying it was “appropriate” to replace Bozhkov as a member of the regulator because of “suspicions of conflict of interest”.
Boev was appointed by the now-departed Plamen Oresharski administration in December 2013, having previously served several months as chief executive of the Bulgarian Energy Holding. His appointment was described by EU energy commissioner Guenther Oettinger as one that “does not contribute to building trust in the independence and impartiality of the regulator” in a letter in April 2013.
Under Boev, the regulator continued the policy of reducing electricity prices – one of the electoral promises made by the Bulgarian Socialist Party, which held the government mandate of the Oresharski cabinet – and also pursued license revocation proceedings against the privately-owned electricity distribution companies, which was seen by local observers as an attempt to boost the socialists’ approval ratings ahead of the May 2014 European Parliament elections. (The socialists were soundly defeated, triggering the break-up of the ruling axis and the resignation of the Oresharski administration.)
SEWRC’s actions to reduce electricity prices are widely seen in Bulgaria as one of the main reasons for the widening debt of Bulgaria’s state-owned electric utility NEK, which reached 2.9 billion leva (about 1.48 billion euro). A big part of that debt has been blamed on NEK’s long-term electricity purchase agreements with two thermal power plants owned by private US investors, AES Maritsa Iztok 1 and ContourGlobal Maritsa Iztok 3.
In May, the regulator asked NEK to renegotiate the terms of long-term electricity purchase contract, saying NEK should seek a 30 per cent reduction in the price of electricity bought from AES Maritsa Iztok 1 and a 20 per cent cut from ContourGlobal Maritsa Iztok 3, while at the same time reducing the amount of electricity bought from the two coal-powered plants in half.