The MPs obliged the Minister of Finance to "return" BGN 1 billion to the Power System Security Fund within a week

With 163 "yes" votes, the deputies of the National Assembly obliged the Minister of Finance Asen Vassilev to take the necessary actions to cover the operating deficit of BGN 1 billion in the Electricity System Security Fund (FSES) by March 31, 2024.

Within the framework of the debate, two theses about the emerging deficit emerged - one of GERB, but supported, albeit with differences, by the opposition in the parliament, and the other of the PP-DB representatives.

According to those behind the decision proposed by GERB, the reason for this deficit in the FSES is Finance Minister Asen Vassilev.

The thesis of PP-DB, presented by the deputy chairman of the commission on energy, Radoslav Ribarski, was that this deficit is the result of EWRC's price decision - in particular, the set price of quotas and electricity.

The Deputy and Chairman of the Energy Committee of the Parliament, Delyan Dobrev, explained at the very beginning of the debates that the money spent in general from the budget so far amounts to BGN 5.4 billion, which represents 3% of the GDP from the Bulgarian energy sector for the last three years. "Until now, FSES has always had reserves of BGN 700-800 million," he said, later clarifying that the deficit that will be formed as of July 1 is BGN 1 billion and offers BGN 1 billion. of these BGN 5.4 billion to be returned to FSES in order to guarantee payments to energy companies. If this does not happen, a 15% increase in the price of electricity will be imposed from 1 July for all electricity consumers - by returning the "duty to society" fee in the amount of BGN 30/MWh or 3 cents per kWh (through the formula for a total electricity production of 33 TWh). "If you don't believe us, read the IMF report," Dobrev pointed out, referring to the note that it was "bad practice to take 100% of the dividend of state-owned companies."

Delyan Dobrev also predicts what will happen if funds are not provided in the FSES and there is an increase in the price of electricity for consumers, this will lead to a jump in the prices of all goods, and hence inflation. Accordingly, Bulgaria will not enter the Eurozone.

Before that, Dobrev also presented a breakdown of the funds from the energy sector that went to the Ministry of Finance from 2021, according to which only from the FSES they are BGN 2.2 billion.

Radoslav Ribarski, for his part, commented that FSES does not depend on the budget, but on KEVR. According to him, the reason for this deficit is the price decision of the regulator from last year. The revenue part of the FSES is not implemented now, because of the price of the emissions, he believes, referring to a set price of 85 euros/ton against the current one of around 64 euros/ton. This forms about 30% of the Fund's budget, Ribarski reminded. Another reason, according to him, is the funds paid to the heating companies, including the guaranteed price of gas, as well as the estimated price of electricity. "The forecast should be of a real cost of emissions and electricity," he pointed out. "Some district heating companies are taking money, and NEK is waiting, which in the chain leads to non-payment of TPP Maritsa Iztok 2, and from there to Mini Maritsa Iztok," Ribarski said. He questioned why EWRC had not revised its pricing decision. "This debate should not be on the back of the finance minister," Ribarski said.

In this regard, Dobrev explained that if KEVR revises the price decision, this inevitably leads to an increase in the price of electricity for consumers by 15 percent. He reminded Ribarski about the decision of EWRC to reduce the preferential prices for electricity of heating companies, and significantly so.

In response to PP-DB MP Vladislav Panev's claim that part of the deficit is also due to electricity compensations due to high electricity prices, Dobrev said that they are from the budget and provided for under a separate mechanism.

Yordan Todorov from the parliamentary group of Vazrazhdane commented that the FSES cannot depend on emissions and launched the proposal that BGN 840 million should remain as a buffer. During the discussions, Todorov explained that if funds are not provided for FSES, but the price decision of EWRC is revised, the increase in the price of electricity will be much higher than 20% due to the elimination of the night tariff from July 1 of this year. He announced that the deputies from Vazrazhdane are categorically against this.

At the very beginning of the meeting, Dragomir Stoynev from the BSP declared for an in-depth conversation about the Bulgarian energy sector and a rethinking of the decision to liberalize the electricity market. BSP is also expected to submit a bill on this topic.

What is recorded in the report of the energy commission

In the report of the Energy Committee on the draft decision, it is recalled that from February 28, 2024, the Chairman of the Fund informed the Minister of Finance about the existence of liquidity problems and the impossibility of fulfilling the obligations according to the Energy Act. This leads to difficulties in payments between the participants in the energy sector and is a prerequisite for chain insolvency of energy companies.

"Over the past 3 years, the Minister of Finance has bled the state energy sector - Bulgarian Energy Holding EAD and the Power System Security Fund - by draining over BGN 3.5 billion from BEH and BGN 847 million from FSES through the SAFE mechanism. The funds were used to cover holes in the state budget as a result of the wrong policies of the finance minister of PP and PP-DB.

There are currently two solutions to the situation. One is for EWRC to consider that there is a need to change the established prices, which in turn will lead to a significant increase in the final price of electricity paid by all consumers - domestic and non-domestic.

The other possible solution is for the Minister of Finance to take actions to ensure financial stability to overcome the created deficit. This will avoid the increase in the final price of electricity for households and businesses and will overcome the blocking of payments between the participants of the energy sector".