BCC criticizes the proposed amendments to the Law on Energy. What are the problems

The Bulgarian Chamber of Commerce (BCC), like the ombudsman and the EWRC, has a number of comments on the proposed amendments and additions to the Energy Law, published by the Energy Ministry at the height of summer - July 27 for public discussion. Given the high public importance, we publish without editorial intervention the opinion of the chamber, expressed in a letter to the Minister of Energy Rumen Radev.

In connection with the draft of the Law on Amendments and Supplements to the Energy Law published for public discussion on 27.07.2023, the Bulgarian Chamber of Commerce - Union of Bulgarian Business expresses the following opinion:

First of all, we welcome the definition for the first time in national legislation of the concepts and entities "civil energy community", "active customers" and "aggregators", respectively - their recognition as parties to electricity transactions.

In the reasons presented to the LAS to EL, there is no justification and motivation for the proposal to drop the granting of a single license for organizing an exchange market of electric energy (§15, art. 43, para. 1, item 2). To the extent that such a step would theoretically promote competition and, accordingly, improve conditions for consumers, it could be accepted as appropriate. From this point of view, it is necessary to make an analysis and a reasonable assessment of the costs and benefits of such an act.

We support the growing use of low-emission energy sources, but we draw attention to the fact that there is no information and justification for the postulation of the mandatory purchase of 60% of the quantities of electrical energy from low-emission sources when forming LV supplies (§23, art. 97, para. 4).

Historically, BCC has consistently pushed for the elimination of cross-subsidization of household consumers at the expense of businesses. At the same time, we have proposed to implement and implement a previously approved action plan to eliminate cross-subsidization and fully liberalize the electricity market. According to the parameters of electricity market liberalization included in the LAS to EL, a number of questions arise that have no solution or justification in the proposed bill:

We consider it confusing and difficult to effectively implement the proposal to enter into force on 01.01.2024 the change on the termination of NEC as a public supplier for household consumers and the removal of producer quotas for the regulated market. The proposed deadline is in the middle of the residential regulatory period, which ends on June 30. This is essential especially in the event that no mechanism has been implemented to provide adequate financial support to individuals/households who are "vulnerable" or in a state of "energy poverty", according to the parameters presented in the draft law, and in a situation, that no new normative documents and corresponding changes in the bylaws have been adopted.

Motives: Essential elements of energy supplies are being regulated, and there is not enough time for transformation of processes and public relations, as well as for informing consumers. Deadlines should be extended or replaced. For example, in 2021, a nine-month transitional period was provided for non-residential customers.

Regulation (EU) 2022/1854, presented as the basis for regulating electricity prices below cost, is in force until 31.12.2023. What will be the basis for this practice after the specified date? (§8, art. 31, item 14);

The concept of energy poverty has not yet been defined in a single act of the European Union. Instead, it is determined by individual Member States in accordance with their own national policies and priorities. The definition proposed in the draft law containing a limited number of criteria for determining "household in a situation of energy poverty", as well as the mention of vulnerable customers without specifying the parameters for their identification and differentiation, are not specific enough and will delay the implementation of the Act and protection to the relevant persons.

Updating the concept of "vulnerable customer" by defining it as "critical dependence on electrical equipment" leaves unspecified a number of practical issues, incl. how it is proven, who is the authority that monitors the proof, etc. It is necessary to use precise and clear wording that does not give opportunities for disputes due to different interpretations;

Elements, definitions and parameters that need to be presented in the law and subsequently clarified through an Ordinance have been transferred to a by-law, i.e. in it to confirm the technology of application of the relevant normative texts in EL. In this case, "the determination of the status of a household in a situation of energy poverty and/or of a vulnerable customer for the supply of electricity... is made according to the criteria, conditions and procedure defined in an ordinance adopted by the Council of Ministers on the proposal of the Minister of Energy, the Minister of Regional Development and Public Works and the Minister of Labor and Social Policy".

For the purposes of specific law enforcement, the exchange of information between the various competent authorities and information systems should be explicitly regulated.

The proposal made to bring the by-laws into line with the changes in the EL within six months after the entry into force of the Law is time immeasurable in relation to end users.

Last but not least, it is recommended that the review, discussion and adoption of changes in legislation from a certain area, when they are related, be carried out in an integrated and synchronized manner - at the same time. From this point of view, we are referring to the changes that are being made in the Law on Energy, the Law on Renewable Energy Sources and the Law on Energy Efficiency.