site.btaEnergy Regulator Launches Extraordinary Check into Performance of Overgas Networks' Licensing Obligations, Financial Status

Energy Regulator Launches Extraordinary Check into Performance of Overgas Networks' Licensing Obligations, Financial Status

Sofia, January 6 (BTA) - By order of its Chairman Ivan Ivanov, the Energy and Water Regulatory Commission (EWRC) is starting an extraordinary check into the performance of the licensing obligations and the financial status of Overgas Networks AD, Bulgaria's energy regulatory said in a press release on Wednesday. "If necessary, the EWRC is ready to execute its functions, acting within the competence conferred on it by the legislation in force," the press release said.

Shortly before the New Year, the State-owned Bulgartransgaz company received a copy of a letter from Gazprom Export to Overgas Inc, stating "zero" in the column on supplies for the Bulgarian public provider. Overgas Export asked state-owned Bulgargaz to take over the supplies to household users, and the respective contract was drafted and concluded on December 31.

On Saturday, commenting on what is called "insinuations" by the CEOs of the Bulgarian Energy Holding (BEH) and Bulgartransgaz about overdue payments, Overgas stressed it did not incur an outstanding debt to any company, including Gazprom Export.

The EWRC is closely following the developments surrounding natural gas supplies from Gazprom Export to Overgas Inc after January 1, 2016. The Commission's Chairman Ivan Ivanov is in constant touch with representatives of institutions and organizations in the sector, as well as all parties concerned which are committed to resolving the matter.

At the EWRC's request, senior executives of Bulgargaz and Overgas Networks were given a hearing on January 4 and 5. The EWRC members were informed of the agreements reached between the two companies, which ensure the continuous supply of natural gas to the final household and business customers of Overgas Networks.

At the meetings, the EWRC acknowledged the efforts made by BEH, Bulgargaz, Bulgartransgaz and Overgas Networks to solve the problem. At the energy regulator's insistence, Bulgargaz and Overgas Networks undertook to inform the EWRC of any changes in the situation.

Interviewed on bTV on Monday Morning, Bulgarian Prime Minister Boyko Borissov described the critical situation with natural gas supply to household suppliers in this country, for which he blamed intermediary Overgas, as an anti-government conspiracy which could have disrupted the entire national electricity system and could have brought hundreds of thousands of protestors to the streets.

"The State has lent a helping hand to Overgas in relation to the unexpected problems with natural gas supply on New Year's eve," Energy Minister Temenouzhka Petkova told journalists here on Wednesday. Bulgartransgaz received information from Gazprom about problems with supplies in the late afternoon of December 30, she explained.

"Since we are responsible people, there was no way for the State not to react in such a situation," she said, recalling the meeting with the Prime Minister and the solution found. Answering questions, Petkova said that she has not talked with Overgas Executive Director Sasho Donchev, but has Overgas's formal letter to Bulgargaz dated December 31, in which the company asked for the immediate signing of a contract to ensure natural gas supply to Overgas's customers. "That was done, and I believe that the State acted responsibly and helped Overgas," the Energy Minister commented.

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Petkova said she expects direct negotiations to start on January 14 with the 12 banks that have expressed interest in lending up to 650 million euro needed by the National Electricity Company (NEK) to pay its debts to the two US-owned thermal power plants (TPPs) in the Maritsa East energy complex. She is confident that the negotiations will be successful, explaining that BEH has the relevant experience and adding that BEH's Executive Director is personally involved in the process. The Energy Minister noted that once the funds are available, the two US-owned TPPs will be able to settle their own debts to the Maritsa East Mines, which are on the verge of collapse.

As agreed with the European Commission Directorate-General for Energy, the criteria for the energy poor will be defined by the end of April, Petkova said in connection to the upcoming electricity market liberalization and the expected entry of household customers in the free market later in the year. The Ministry of Labour and Social Policy is preparing information about the criteria that are currently applied to allocating energy allowances, their amount and the number of beneficiaries The data will be analyzed so as to draft the criteria in such way as to make sure that the allowances reach those that really need them, the Energy Minister explained.