site.btaEnergy Regulator Chairman: 2015 Is Last Chance for Substantal Reforms in Energy Sector

Energy Regulator Chairman: 2015 Is Last Chance for Substantal Reforms in Energy Sector

Sofia, June 24 (BTA) - Speaking at an open-door parliamentary
hearing on the new pricing model for electricity due to take
effect from July 1, the head of the energy regulator, Ivan
Ivanov, said that 2015 is the last chace for carrying through
substantial reforms in the energy sector if it is to stabilize
financially, provide adequate services to the pubic and the
business and start operating on a liberalized market from the
beginning of next year.

The parliamentary hearing is broadcast live on the Bulgarian
National Television and the National Radio. The head of the
parliamentary energy committee, Delyan Dobrev, said this aims to
 give maximum publicity to the arguments of the regulator as it
is trying to set in place a new pricing model and deal with the
dire straits in the sector.

The hearing also comes a day after the parliamentary committee
for oversight of the energy regulator adopted legislative
changes to give a month's grace period to the increase of
electricity prices. This time is expected to be enough for
completing an ongoing audit of power plants using renewable
energy sources, put into force an ordinance to reduce partially
the contemplated price increase for large industrial users and
cut back by 10 per cent the administrative costs in state-owned
energy companies.

The regulator is due to decide on Friday whether the electricity
 price for businesses will increase or not.  

In Parliament's debating chamber, Ivanov went through the
propopsed changes: limiting the quantity of electricity
purchased by the public supplier (National Electricity Company)
from co-generation facilities to only high-efficiency
co-generation and leaving the rest of the output for sale on the
 free market; and using the EU platform for trade in carbon
emissions with the proceeds going directly to the public
supplier.

Ivanov said that the regulator aims to ensure fair electricity
prices, including by adjusting the Public Obligations charge.
Currently, the biggest weight of this charge goes to domestic
users and small business which pay 53 leva/MWh while the large
users buying electricity on the free market only pay 19 leva.
What the regulator wants to do now is raise this charge to 40
leva for the latter group of users. Ivanov explained that the EU
 directives allow a reduction of the Public Obligation charge
for large indsutrial users, which will reduce the final price by
 some 1 per cent.

Ivanov also said that the contemplated measures will allow NEK
to start making a profit from the end of the next regulatory
period.

The representatives of the regulator in the debating chamber
urged the legislature to make sure they use the suggested
one-month postponement of the price increase to carry through
real changes - or else NEK will continue making losses.