site.btaProposed Energy Act Revisions May Cause Household Electricity Price Hike, Regulator Warns

In a position published on its website on Friday, the Energy and Water Regulatory Commission (EWRC) expressed disagreement in principle with the proposed market models and particular provisions of draft amendments to the Energy Act that have been submitted to public consultations by the Energy Ministry.

"Instead of a balanced adjustment of regulated prices until their levelling with liberal market prices, the proposed model, in the present market situation, may lead to a steep rise in end prices of household electricity as early as from January 1, 2024 or delayed as from January 1, 2026 at the latest," the EWRC opinion leads.

The Commission argues that the elimination of the regulated wholesale market, effective January 1, 2024, will pose insurmountable difficulties above all to end suppliers in procuring the amounts of electricity they need to meet the demand of household final consumers.

The regulator points out that the determination of availability for generation of electricity for the generating companies and the approval of their prices is the basic and most important regulatory instrument for keeping electricity prices for household final consumers predictable and stable. The elimination of this instrument should be phased in, in the form of a smooth transitional period of at least two or three years and not abruptly, as the draft amendments provide.

This has to be done because there are still substantial differences between the price levels at the regulated and liberal retail electricity market that can broaden considering the complete unpredictability of the geopolitical situation, the demand for energy on a global scale, the actions of the principal central banks and other key factors.

In objections to the same bill, sent to Energy Minister Rumen Radev on Thursday, National Ombudsman Diana Kovatcheva insisted that rushing the liberalization of electricity prices even this coming winter is dangerous. Kovatcheva believes that the debatable provisions should be reviewed because they do not sufficiently protect citizens' rights.