Bulgarian MPs give utilities regulator final arbiter role in energy sector deals
Bulgaria’s Energy and Water Regulatory Commission (EWRC) will be required to give final approval on any deals involving the sale of stakes larger than 20 per cent in electricity or gas distribution companies, under amendments to the Energy Act approved by Parliament at second reading on September 26.
Delyan Dobrev, chairperson of the National Assembly’s energy committee and MP for GERB, the senior partner in the ruling coalition, argued that the bill would merely create more clarity, since EWRC was already required to rule on such transactions, following amendments passed by Parliament in spring 2018.
The opposition socialists also backed the amendments, saying that the state should be able to “defend its citizens” – a remark that prompted a squabble with GERB’s MPs on the topic of the proposed sale of CEZ assets in Bulgaria.
That deal, announced in February, is the reason that prompted the amendments giving EWRC a larger role in the regulatory approval stage. Previously, it could only block a transaction if it would create a clear obstacle for energy distribution companies to meet the terms of their operating licences.
Czech state-owned CEZ triggered a political storm with its announcement, which gave rise to fears that the prospective new owner, little-known Bulgarian company Inercom that was set up last year, lacked the necessary know-how to ensure that there would be no disruption in the quality of service. CEZ’s power distribution unit services western Bulgaria, including the capital city of Sofia.
The deal has already been blocked by the anti-trust regulator in July, but the decision is being appealed and Inercom said last week that it was divesting its solar parks – a reason cited by the Commission for Protection of Competition in its ruling – and would apply for regulatory approval again.
Meanwhile, the earlier amendments requiring EWRC to rule on energy company deals did not specify the criteria under which the regulator is to do so, with the main subject of dispute being whether it should be Parliament that drafts the criteria or the Energy Ministry.