site.btaDeputy PM Donchev: Government Is Against Increase of Electricity Prices

Deputy PM Donchev: Government Is Against Increase of  Electricity Prices

Sofia, June 21 (BTA) - For two hours and a half on Sunday,
ministers and experts discussed at an extraordinary meeting with
 Prime Minister Boyko Borissov the options for limiting the
increase of electricity prices, which was proposed by the Energy
 and Water Regulatory Commission (EWRC) several days ago. 
Emerging from the meeting, Deputy Prime Minister Tomislav
Donchev told journalists that the Government is against the
appreciation of electricity.

There were no EWRC representatives at the meeting.

Donchev said that the State will help by reducing the
administrative expenditures in the Bulgarian Energy Holding
(BEH) and the National Electricity Company (NEK) by 10 per cent.
 Energy Minister Temenouzhka Petkova specified that this
reduction will take place over the next three years. BEH's
tariff deficit is already 4 billion leva and it will continue to
 increase unless measures are taken, Donchev went on to say,
adding that other EU Member States are in a similar situation.
    
He also said that, as far as he knows, the decision on the
appreciation of electricity has been taken unanimously by all
EWRC members. "EWRC is elected by Parliament and on it are
representatives of almost all parties, which is why I am
surprised by a difference of positions between the parties and
their representatives on the EWRC," the Deputy PM told
journalists. The Government calls for a discussion on the EWRC
electricity price report early next week, and this discussion
should be open, public and held in Parliament, Donchev added.

The State and Financial Control Agency is already checking the
real investments of all energy producers and, most of all,
renewable energy producers, he went on to say. Petkova specified
 that the results from this check are expected within two weeks.
 Donchev called on the European Commission experts to conclude
sooner their check into a possible excessive support by the
State for renewable energy producers.
 
The Deputy PM noted that the options for exiting the present
situation are not many: either a reduction of the electricity
production expenditures, or a limitation of the prices for some
types of productions. "We can also use the European experience
and introduce changes in the tax rate, which is the case in
Portugal and Italy," he said.
   
The Energy Minister said that a draft ordinance introducing
concessions in the electricity price for big companies,  which
is already being discussed, can be amended so as to expand the
concessions' range.

Also on Sunday, employer organizations insisted at a BTA-hosted
news conference that the electricity prices be frozen until the
end of 2015. This issue cannot be solved within three days, said
 Bulgarian Industrial Association Executive President Bozhidar
Danev. "Can the price increase when you have capacities of
12,500 MW and usage of 2,700 MW," he asked rhetorically.

The business circles want the elaboration of a roadmap for a
reform in the energy sector with outlined targets, which each
target being followed by specific steps for its implementation,
reference points with values to be achieved, specific
implementation deadlines, one person responsible for the
implementation and another for control, and sanctions for
non-implementation. The employer organizations insisted that the
 deficit in the energy sector, including at NEK, be limited
without an increase of electricity prices.

They also called for: competent and "non-thievish" management of
 the companies with state ownership; in-depth changes, including
 for the efficiency of the existing workforce; uncorrupted
management of the supply of services and materials; permanent
monitoring of the production processes in the name of
optimization, as well as monitoring of the export; and limiting
the losses in the network.

In an open letter published on Sunday, the Energy and Mineral
Resources Committee with the American Chamber of Commerce in
Bulgaria (AmCham) supported the Government and EWRC, which in
the last months undertook a series of important steps aimed at
reforming the Bulgarian energy sector.

The long-term reforms in the energy system should be based on
the key principles of transparency, predictability and
sustainability, with particular efforts on keeping the energy
regulator independent, stabilizing and strengthening the
regulatory environment, and solving the problems with the
sector's deficit and liquidity, the letter reads.

AmCham also expressed support for EWRC's efforts to act as an
independent regulator that adopts decisions which provide
transparency and financial stability in the energy system.

Commenting on Sunday's extraordinary governmental meeting,
Bulgarian Socialist Party (BSP) leader Mihail Mikov said that
the Government's reaction against an increase of electricity
prices causes bewilderment. In his words, this is an attempt at
escaping from the EWRC's decision, which is ungrounded and puts
the Bulgarian industry at serious risks. The decision was taken
by representatives of GERB and the Reformist Bloc at EWRC, he
said.

Mikov also said that the EWRC's decisions redistribute resources
 from the public to the private sector, and the result is a
higher profit for the AES Maritza East 1 and ContourGlobal
Maritsa East 3 thermal power plants and the photovoltaic
stations.

According to the Socialist leader, reducing the salaries of
power engineers in the public sector will not solve the
problems. These experts, particularly in nuclear energy, will go
 work in Turkey, where Russian nuclear plants are already being
constructed, he added. 

Delyan Dobrev MP of GERB told journalists that the EWRC decision
 on the increase of electricity prices was adopted unanimously,
and all parliamentary groups except Ataka are represented on the
 Commission. This means that the decision was supported by BSP's
 representative, he added. "Mihail Mikov was not paying
attention when the EWRC composition was being adopted. Mikov's
talks sound incoherent to me, even as an attempt to avoid
political responsibility," Dobrev said. He denied Mikov's claims
 of distribution of money from the public to the private sector,
 specifying that exactly the opposite is happening.
   
Bulgaria for the Citizens Movement leader Meglena Kuneva said
that her party (part of the Reformist Bloc) does not accept the
proposed increase of electricity prices and will demand a
hearing in Parliament of the EWRC Chair so as to establish the
reasons for this proposal.

Kuneva also said her party wants changes in the Energy Act and
full disclosure of all contracts for buying and supplying
electricity. She added that the European Commission has
recommended the establishment of an energy exchange in Bulgaria
as of January 1, 2016, and this requires knowledge about how the
 electricity prices are determined.

The Bulgaria for the Citizens Movement also wants the National
Audit Office to audit all state-owned enterprises and companies
with 50 per cent state or municipal participation working in the
 energy sector.