site.btaUPDATED President Radev Vetoes Latest Energy Act Amendments

Bulgarian President Rumen Radev has imposed a suspensory veto on the revisions to the Energy Act adopted by the National Assembly on October 6, 2023, the President's Press Secretariat reported on Thursday.

The head of State argues in his reasons that, without disputing the need to align domestic legislation to the commitments assumed by Bulgaria to the EU, the full liberalization of the electricity market for household users by 2026, envisaged by the law, does not provide for protection of energy-poor and vulnerable users which EU law enables and requires.

"The standard of living of the majority of Bulgarian citizens remains the lowest in the EU, and the amendments could make life even more difficult precisely for the people who anyway can barely make ends meet," Radev points out.

"The law has moved away from the objectives of the social State and has been adopted without an accompanying impact assessment even though it makes provisions affecting Bulgarian citizens' well being and the stability of the energy system," the reasons for the veto read.

In reality, the balanced adjustment of regulated prices until their levelling with free market prices is supposed to happen within a short period of 18 months (from July 2024 to December 2025), which may lead to a spike of prices for household end-users in early 2026, Radev warns.

In his opinion, the too narrow definition of energy poverty, the lack of clarity in the compensation mechanism and the uncertainty that there will be enough financial resources to aid those in need do not provide sufficient guarantees that the transition will be smooth.  

The President insists that the cessation of the functioning of the National Electricity Company as a public provider as from July 1, 2024 and the abolition of electricity producer quotas in the mix for the regulated market may force the Maritsa East 2 TPP to discontinue the generation of electricity and will endanger the operation of the Maritsa East coal mines as early as in the middle of 2024.

Prime Minister Reacts to President's Criticism

"There is no risk of a price spike," Prime Minister Nikolay Denkov told journalists later on Thursday, commenting on Radev's veto.

"This liberalization had to be carried out, the Regulation dates from 2019. Bulgaria is lagging considerably behind the timeline to which it has agreed," the PM said. He specified that the amendments to the Energy Act had been drafted to include mechanisms that will be used  to avert "these apocalyptic scenarios advanced by the opposition". Denkov argued that the mechanisms will protect vulnerable users. He does not expect problems with Parliament overriding the veto. 

"First, this had to be done. Second, mechanisms are in place so that neither electricity consumers nor electricity producers will experience difficulties," the PM added, referring to domestic electricity market liberalization.

Electricity prices may rise but by as little as 2%, and they may also fall. "A large part of the new technologies that are being implemented in energy production make it possible to produce cheaper electricity than the one we use now. The problem with them is that they cannot be used on a 24/7 basis. That is why present-day energy production requires a combination of baseline capacities, such as nuclear and coal-fired power plants, with other capacities," Denkov emphasized.

"The opposition is trying to scare people. I hope that the President is not stuck in the same rut".