site.btaWater Regulator: Three Insurmountable Factors Determine Water Price

During a hearing on problems in the water sector and a controversial increase of water prices, Energy and Water Regulatory Commission (EWRC) Chair Ivan Ivanov said that there are three insurmountable factors when the price of water and water services are determined: a five-year agreement for 15% annual wage raise in the water sector, inflation, and the price of electricity.

The prices of water and sewerage services increased in Sofia and most regions in the country since the start of 2025. Sixteen regional operators raised the prices by less than 5%. Another 13 operators raised the prices between 5% and 10%, and two companies, in Sliven and Berkovitsa, raised their prices by 19.8% and 12,8% respectively.

The EWRC Chair said that within the 5-year regulatory period (2022 - 2026) the Commission is obliged to implement a national agreement concluded between the Minister of Regional Development and Public Works, the Confederation of Independent Trade Unions in Bulgaria, and the Bulgarian Water and Sewerage Holding. According to this agreement, the EWRC must increase the funds for wages in the sector by 15% annually. "We are fulfilling this obligation unconditionally. That is why this is the first unavoidable factor that influences the price of water, since personnel costs are price-forming," Ivanov said.

Ivanov listed the inflation index as the second factor. He acknowledged that inflation for 2024 is less than 2%, however, the current methodology for each water and sewer operator is to calculate the inflation index from the effective date of the business plan to the date of the change. He said that between May - June 2022 and November 2024, when the EWRC was preparing the rate change decision, the inflation index was 14.2% for business plans approved in May 2022 and 13.2% for those approved in June 2022.

The third key factor is the price of electricity. Ivanov recalled that the EWRC regulates prices only for household consumers, while water and sewerage operators purchase electricity at market prices from the Independent Bulgarian Energy Exchange. While a single subsidiary of the Bulgarian Water and Sewerage Holding is helping the operators by purchasing electricity wholesale to reduce the prices, they are still significantly higher compared to back in 2022.

Ivanov said that the combination of these factors leads to an average price increase of 4.5%. He added that the water price set by the EWRC is a cap, not a mandatory price. Water and sewerage companies can choose to reduce it, if they have economic and financial reasons.