site.bta Electricity Prices for Corporate Users to Rise by between 1 and 9%, Energy Committee Chair Says

Electricity Prices for Corporate Users to Rise by between 1 and 9%, Energy Committee Chair Says

Sofia, June 11 (BTA) - Parliament's Energy Committee Chair
Delyan Dobrev (GERB) told a news briefing on Thursday that the
electricity price approval procedure should continue because it
is not true that electricity prices for non-household users will
 increase by 20 per cent - the increase will be only between 1
and 2 per cent for the industry sector and between 8 and 9 per
cent for the services sector.

The price decision of the Energy and Water Regulatory Commission
 (EWRC) for the period between July and December 2015 provides
for a fairer distribution of public obligation costs between the
 free market and the regulated market, Dobrev argued.

He explained that up until now, the public obligation component
of the electricity price has been 50 leva/MWh for participants
in the regulated electricity market and 19 leva/MWh for
free-market players. EWRC has now decided that it will be 40
leva/MWh for both markets. This implies that free-market
participants face an increase from 19 to 40 leva, but industrial
 users will not have to pay 40 leva because there is an
ordinance being coordinated which will reduce the price burden
on industrial users of electricity, Dobrev said. He added that
the ordinance will be ready next Monday. It will reduce the
public obligation price component for industrial users of
electricity from 40 leva/MWh to 21.64 leva/MWh, which is not
much more than the current 19 leva/MWh. Therefore, the price of
electricity sold to industrial users will be eventually set at
between 110 and 120 leva/MWh, increasing by between 1 and 2 per
cent compared with the current level, Dobrev said.

For other corporate users which are not in the industry sector
but in the services sector - including retail chains and
shopping malls - the public obligation surcharge will increase
from 26 to 40 leva/MWh, not from 19 to 46 leva/MWh, because they
 use medium-voltage electricity and there are other charges
which they have paid until now. So the price of electricity for
them will become 160 leva/MWh, increasing by between 8 and 9 per
 cent, the lawmaker explained.

According to Dobrev, the EWRC decision not only creates balance
in the electricity system but also gives the National
Electricity Company a reserve of between 50 million and 100
million leva. "We do not expect a deficit - rather, we expect a
small surplus during the period from July 1, 2015 until July 1,
2016," he said.

The smallest companies in the services sector, which will not be
 covered by the future ordinance, bought electricity on the
regulated market until six months ago, which meant they had to
pay 15 per cent more than they do now, Dobrev said. For a
certain period of time afterward they were buying electricity on
 the free market, just like industrial users. That is to say,
they will enjoy better terms even after July 1 as the rate for
them will be 5 or 6 per cent lower compared with the time they
were buying on the regulated market, he explained. "There have
been speculations that commodity prices will rise. But when
those companies began to pay 15 per cent less, the prices did
not fall, did they?" he reasoned.

Reacting to Prime Minister Boyko Borissov's proposal to delay
the electricity price increase decision by a month, Dobrev said
it should not be delayed. "A delay would make sense if there was
 an outstanding problem which required more time to address,"
Dobrev said.

According to him, EWRC's price decisions have nothing to do with
 the upcoming local elections, especially because the regulator
is independent.