site.btaIndustrial Energy Consumers Urge Postponement of New Natural Gas Rates

Sofia, September 18 (BTA) - The Bulgarian Federation of Industrial Energy Consumers (BFIEC) have sent a letter to Prime Minister Boyko Borissov and Deputy Prime Minister Tomislav Donchev warning them of grave consequences from a contemplated change in the rates for transmission of natural gas from October 1, 2017. The letter, which was also sent to the news media, says that the matter has been discussed many times with the Energy Minister and the energy regulator but the position of the BFIEC has been ignored.

"What was proposed is only a partial delay of the price increase and this is no solution," the Federation says.

They disprove the allegations of gas transmission operator that the transmission rate increase is called for by the European rules and say that the European regulations have nothing in them that would bring about such an increase.

They warn that the way it is configured, the entry-exit model will make impossible the liberalization of the natural gas market because no gas supplier will be able to compete with Gazprom with the low profit margins on the market.

The Federation also point out that the rate increase was not accompanied with an impact assessment.

They warn that the new method of distributing the costs "will surely hamper the import of gas from sources which are alternative to the Russian Federation".

BFIEC say that while they are not against the requirements for transposing the EU rules, they believe that this cannot be a goal per se and that the key principles for proportionality and nondiscrimination should continue to apply.

"Considering the specifics on the Bulgarian energy market, we categorically call for postponing the proposed model until a realistic and comprehensive impact assessment is prepared with the participation of all stakeholders and the flaws are eliminated," the Federation says.

They tell the Prime Minister and his deputy that as these flaws impact the fundamental development, liberalization and functioning of the natural gas market, they might resort to "measures which are unusual for the industry and organize protests".

On Friday, four nationally representative employer organizations said that Bulgartransgaz used a misleading excuse for its plan to increase the rates for transmission of natural gas, claiming that this is called for by some EU requirements. In a letter to the energy regulator, the Association of Industrial Capital in Bulgaria, the Bulgarian Industrial Association, the Bulgarian Chamber of Commerce and Industry and the Confederation of Employers and Industrialists in Bulgaria say that no European document requires an increase of the transmission rates. They also pointed out that the price increase proposal lacked impact assessment.