site.btaRegulator Seeks Ways to Cut Electricity Mix Price to Offset NEK's Deficit

Regulator Seeks Ways to Cut Electricity Mix Price to Offset NEK's Deficit

Sofia, April 23 (BTA) - Ivan Ivanov, Chairman of the Energy and
Water Regulatory Commission (EWRC), said that in the two months
until the start of the new regulatory period for electricity
prices the regulator would try to strike the best possible
balance between the electricity quotas bought from various
generating capacities so that the average price of the
electricity mix can be reduced to the level at which the
National Electricity Company (NEK) sells electricity as a public
supplier.

Ivanov was speaking at a discussion on Thursday.

In any case, the situation will improve considerably from the
previous regulatory period when the price of the electricity mix
- the sum total of the electricity NEK buys from various
producers - was of the order of 160 leva/MWh, while NEK was
selling electricity at 125 leva/MWh as a public supplier.

Ivanov recalled the measures the regulator would take to shrink
the deficit: NEK will pay 100 million leva less to the green
power plants due to the Energy Act amendment under which
electricity will be purchased in line with the operational
hourly limits per year (set by the regulator) entitled to
feed-in tariffs, and will save 97 million leva from cutting the
capacity availability price of the US-owned AES Maritza East 1
TPP and ContourGlobal Maritsa East 3 TPP. NEK will earn 240
million leva in revenues from trade in carbon emission
allowances. Preliminary estimates put the saving from limited
purchases of electricity from co-generation plants at 250
million leva, said Nikola Nikolov from the Photovoltaic
Association.

After participating in the discussion, Energy Minister
Temenouzhka Petkova said the public should be informed about
what will happen after the full liberalization of the
electricity market. The Ministry and the Bulgarian Energy
Holding are mulling a campaign to popularize it. This will
happen after a model of a Bulgarian electricity exchange is
chosen definitively, she said.

Former energy minister Roumen Ovcharov of the Bulgarian
Socialist Party said at the discussion that the regulator would
fail to offset NEK's deficit through the planned measures.
Launching the electricity exchange is not a solution either
because the Bulgarian market is too small to have its own
exchange, Ovcharov said, suggesting that Bulgaria should join
the regional exchange.

Stefan Abadjiev of Energo-Pro, the electricity distribution
company operating in Northeastern Bulgaria, said that people
expect electricity prices to fall after the liberalization but
this may not materialize. Representatives of CEZ and EVN, the
electricity distribution companies for Western and Southeastern
Bulgaria, urged that before the full liberalization the
experience of the other European countries should be studied and
all prerequisites should be in place for the functioning of the
electricity exchange.