site.btaState's Negotiations on Termination of Contracts with US-Owned TPPs Will Take Months - Deputy Energy Minister

Sofia, March 19 (BTA) - The negotiations of the Bulgarian State with the two US-owned TPPs on termination of their electricity sale agreements will take months rather than weeks, Deputy Energy Minister Zhecho Stankov told journalists on Monday.

"We must be very careful and the negotiations must be conducted on a diplomatic basis so as to reach the best solution for customers," he added. The principal negotiator is the Ministry of Finance, where the documents on calculation of the return on investment have been drawn up, Stankov explained.

"The Bulgarian State has developed a methodology for calculation of the return on investment which has been submitted to the plants' owners," said Bulgarian Energy Holding Executive Director Petyo Ivanov. "The plants' owners have asked for at least three months to analyze the methodology," he added.

On Friday, Energy Minister Temenouzhka Petkova told journalists that the 15-year agreements, under which the National Electricity Company (NEK) is bound to purchase the electricity produced by the two US-owned coal-fired power plants in the Maritsa Basin at preferential prices, will be terminated. The companies will be paid compensations for their investments in the construction of one plant and the operation of the other - costs that they will be unable to recover from the price of electricity in case of an early termination of their contracts. After that, the two TPPs will sell their output on the liberalized market.

On Thursday, European Commission Vice-President Maros Sefcovic told the members of the National Assembly Energy Committee that the Commission had considered and approved a methodology for calculation of the compensations which Bulgaria proposed in January 2018.

Petkova said on Friday that the European Commission had not adopted a decision on unlawful State aid with regard to the preferential prices paid to the two plants under the long-term electricity purchase agreements.

The agreements were concluded before Bulgaria joined the EU, but the country failed to notify Brussels for a decision on whether they were compatible with the Union's State aid rules. The Commission did not rule that the agreements constitute unlawful State aid because, if it does so, it will have to sue Bulgaria and the Government, in turn, will have to sue the two US-owned plants, but winning these cases is far from certain, insiders said, according to www.mediapool.bg.