On first reading in the National Assembly: (In) complete liberalization of the energy market in our country and preservation of regulated prices for households until 2026

Energy / Bulgaria
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Source: 3eNews, archive

The Parliament adopted in the first reading the amendments to the Energy Act, which provide for full liberalization of the wholesale electricity market by the end of 2023, while retaining household consumers in a regulated market until 2026. 98 people's representatives from GERB voted in support of the amendments -SDS, "We continue the change-Democratic Bulgaria" (PP-DB) and DPS, and 49 were "against". The bill was opposed by "Vazrazhdane", "BSP for Bulgaria" and "There Is Such A People", which expressed concerns about an increase in household electricity bills, BTA recalls.

Household customers are categorically protected, as final suppliers and traders will supply them with electricity at regulated prices with guaranteed compensation, stated Energy Minister Rumen Radev at the beginning of the debate. He pointed out that the other significant amendment in the proposed bill is related to the introduction of a national definition of vulnerable customers for the supply of electricity.

The amendments terminate the role of the public supplier of "National Electric Company" EAD (NEC) and remove producer quotas for the regulated market. The bill stipulates that final energy suppliers, such as universal service providers, are obliged to supply household customers and that the latter are not obliged to change their supplier. During the transition period, end suppliers will supply household end customers at regulated prices. The possibility of compensating residential customers for the costs of purchasing electricity is envisaged within the regulatory process for the period up to 2026.

Temenuzka Petkova (GERB-SDS) said that the bill calls for liberalization of the wholesale energy market. "No one is asking us to bring home consumers to the free market," she said. However, Petkova noted that the draft law has many provisions related to household consumers that require serious revision. According to her, a part of them should drop out. We are not ready to implement this liberalized retail market, said Petkova. She explained that energy poverty is only defined in terms of electricity and it will only work when they are willing to bring household consumers, gradually at that, to the free market. But first, a mechanism must be developed to protect these vulnerable energy consumers. We still do not have clarity from where these funds will be provided, so that household consumers are protected, she added. The Bulgarian consumer must remain on a regulated market and we must liberalize the wholesale market, said Petkova.

Dragomir Stoynev ("BSP for Bulgaria") commented that the main goal of this bill is not to have peace of mind for households and businesses, but to absorb the funds from the Recovery and Sustainability Plan. That is, for 850 million euros, we are ready to destroy the last sector left in the Bulgarian economy, namely energy, he pointed out. Stoynev noted that citizens are worried because from the middle of 2024, NEK will not be a public supplier, i.e. the state voluntarily relinquishes its functions and there is a hypothesis to separate three public suppliers in the form of electricity supply companies.

Until now, if the mix was determined by the Energy and Water Regulatory Commission (EWRC), now I don't see who will convince the electricity distribution companies (EDCs) themselves to make it so that there is a low cost of the mix, ie. if it is now 150 BGN, nothing prevents it from being 250 BGN, 350 BGN, he commented. In this regard, Stoynev expressed concerns about speculation and cartel agreements. There is no date on which household consumers will have to go on the free market, he pointed out and urged no rush. As far as I understand, we will create a second private energy exchange, commented the MP. "Everything will be on the backs of the Bulgarian citizens. You once called them terrorists, but I think the terrorists are here in this hall," added Stoynev.

Radoslav Ribarski (PP-DB) pointed out that non-domestic consumers have been on the free market for many years, there are no cartel agreements, and EWRC is precisely for this, to regulate these relationships in the market. The state does not give up any functions, he was categorical. What is currently happening, that some state-owned companies are depriving themselves of market revenues in order to maintain the regulated cost of living at low levels, is detrimental to the Bulgarian economy, he believes. According to Ribarski, state-owned companies need investment. He noted that the bill offers a number of protections for residential consumers. At the moment, it is clearly spelled out and implies that the state-owned companies and all other electricity producers replenish the "Security of the electricity system" fund, and from there the money goes precisely to compensate for the difference between the market and regulated price, he explained. The electricity will not be increased, the price decision of EWRC remains in force and I appeal to stop faltering politically in instilling fears and worries, urged Rybarski.

Yordan Todorov ("Vazrazhdane") replicated it that this regulated price remains until December 31, 2025, then from January 1, 2026, Bulgarian households will bear the full burden of the free market. According to him, their electricity bill will jump between 200 and 300 percent, and in the winter months they can jump more than 10 times compared to the bills they are currently paying.

Pavela Mitova ("There Is such A People") commented that once again Bulgarian politicians are trying to make themselves "bigger Catholics than the Pope" in front of their European partners. She pointed out that the directive did not specify a specific date for the liberalization of the consumer market. The changes are to the detriment of the final household users, who will depend on the large ERPs, as the price of electricity will also depend on them, commented Mitova. She pointed out that with the changes, the entire Marishki energy complex is doomed to irreversible and total closure. The removal of the annual quotas from the Energy Law puts them in a situation where the companies will not be able to exist, added Mitova. According to her, the expected effect of the adoption of these amendments will be mass impoverishment, a drastic increase in electricity bills and stock market speculation.



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