site.btaEnergy Act Amendments Liberalize Domestic Electricity Market

Bulgaria's Parliament on Thursday passed conclusively amendments to the Energy Act envisaging a liberalization of the electricity market for household end-users.

Under the revisions, regulated prices for final household customers will apply until December 31, 2025. An option is provided for compensating household users for the cost of purchasing electricity within the regulatory process until 2026.

As from July 1, 2024 the National Electric Company (NEK) will cease to be a public provider and the producer quotas for the regulated market will be abolished.

The Energy and Water Regulatory Commission (EWRC) will set a component of the end supplier's regulated price in connection with the electricity supply of final household customers and will be setting, on a monthly basis, a compensation to offset part of the costs incurred by final household customers for electricity purchased from end suppliers at regulated prices. 

The compensation will be determined as a difference between the weighted average price reached at a day-ahead market segment applicable to the end supplier concerned for the relevant month and a baseline value of electricity set by the relevant annual State Budget Act and/or a programme adopted by the Council of Ministers which is charged from the final household customer for the appropriate regulatory period. The compensation may cover all or part of the amount of electricity purchased by final household customers. The amount of the compensation may vary by the amount of electricity purchased.

By May 31, 2024, the EWRC and the Ministry of Energy will carry out awareness raising campaigns for final household customers regarding the benefits of market liberalization, the possibilities to choose an end supplier and the options to have the prices charged from them compensated.

End suppliers will have until June 30, 2024 to conclude a contract for compensation with the Electricity System Security Fund.

The amendments to the Energy Act introduce the notion of "vulnerably electricity customer", which is defined as a household customer who purchases electricity for the domestic needs of a household of which they are a member and who and/or another member of the same household is critically dependent on electrical equipment by reason of age and/or state of health and/or receives a monthly social assistance and/or a targeted heating allowance pursuant to the Social Assistance Act.