CEWR published the Ordinance on the liberalization of the electricity market in the transition period until 2026

Energy / Bulgaria
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The Commission for Energy and Water Regulation (CEWR) published the draft of the Ordinance on the regulation of electricity prices, which will be applied in the liberalization of the wholesale electricity market. The document, as well as the report of the working committee, are published on the website of the regulator.

The amendments to the Ordinance provide that during the transition period, namely until 2026, final suppliers are obliged to supply final household customers at regulated prices, with CEWR to determine the component of this price. It is also recorded that CEWR determines a monthly compensation to cover part of the costs of household final customers for purchased electricity from a final supplier at regulated prices, and it is regulated how this compensation is formed.

CEWR motivates the proposed changes with the amendments and additions to the Law on Energy, (promulgated SG No. 96 of 2023) which, as they state, "proceeds to the next stage of the liberalization of the electricity market, which provides for full liberalization on the wholesale electricity market while keeping domestic consumers on a regulated market until 2026.

The figure "public electricity supplier", the determination of the estimated monthly availability for electricity production of the producers from which the public supplier shall purchase electricity, as well as the amount of electricity according to which the public supplier shall enter into transactions with the end-users shall be removed. suppliers.

In this regard, the obligation of the Commission for Energy and Water Regulation to approve prices at which: producers, within the limits of their determined availability, sell electricity to the public supplier is no longer required; the public supplier sells to end suppliers the purchased electricity for the needs of the regulated market and the end suppliers sell electricity to residential end customers for facilities.

During the transition period, namely until 2026, final suppliers are obliged to supply final household customers at regulated prices, and CEWR is expected to determine the component of this price.

It is also planned that CEWR will determine a monthly compensation to cover part of the costs of domestic end customers for purchased electricity from an end supplier at regulated prices, and it is regulated how this compensation is formed", are motivated by the regulator for the reasons necessitating the amendment of the Ordinance. A number of other texts have been refined and the documentary gap has been filled.

Thus, in the transition period (until the full liberalization of the market in 2026 for domestic consumers), final suppliers will be obliged to supply electricity to households at regulated prices. EWRC, for its part, will determine only a component of it. This component will be in the amount of up to 7% of the basic value of electricity for 1MWh, which a household customer should pay for a relevant regulatory period, determined by the law on the state budget for a relevant year and/or program, adopted by the Council of Ministers.

The component must include economically justified costs and returns for the activity "supply of electricity from the final supplier", as well as balancing costs, and is defined as a total value without specifying the specific size of the elements that make it up.

If the basic price of electricity is not recorded in the budget, the component is formed in the amount of up to 7% on the estimated market price. It is determined by EWRC for each market period on the basis of an analysis of the futures and/or forward transactions for that period on the national and regional exchanges, as well as on the futures transactions on the European exchange related to the Bulgarian market.

It is also envisaged that the regulator will determine a monthly compensation to cover a part of the costs of household final customers for purchased electricity from a final supplier at regulated prices, and how this compensation is formed will also be determined.

In addition, the new regulation introduces a new figure - of operators of closed electricity distribution networks.

It is expected that the amendments to the new EWRC Ordinance will provide an opportunity for full liberalization of the retail market.

The public hearing is scheduled for February 22.

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