site.btaUPDATED Energy Minister Talks with Employer Organizations

The programme for compensating non-household consumers of electricity for prices exceeding the BGN 180/MWh cap will be proposed for extension by three months. The period matches the duration of a proposed bill to bridge the public finance gap until the passage of the budget laws for 2025, caretaker Energy Minister Vladimir Malinov told a briefing on Friday, emerging from talks with employer organizations.

Compensations for high electricity prices for non-household consumers were introduced in 2021 as a business protection measure. Initially, their size was set on a monthly basis. An electricity price cap was enforced in 2022, originally at BGN 250/MWh, to be lowered to BGN 200/MWh in 2023 and BGN 180/MWh in 2024.

Vasil Velev, Chairman of the Management Board of the Bulgarian Industrial Capital Association (BICA), said Friday that employer organisations want the compensation threshold of BGN 180 per MWh to be maintained. In his words, the organisations have held meetings with almost all parliamentary parties, which have assured  them that the current provision in the 2024 State Budget Act will be included in the new law on expenditures and collecting revenues. The law will have a time limit of three months until the 2025 state budget is passed in its entirety.

Velev stressed that non-domestic electricity consumers include not only production enterprises, but also budget-dependent facilities such as kindergartens, schools, universities, hospitals, community centres, libraries and houses of worship. He warned that the lack of compensation creates uncertainty for businesses, which can lead to higher prices for products and services, reduced production, wages, and staff.

At the same time, Velev called on businesses to wait before calculating new prices, as assurances had been received that the programme would continue.

However, the protest readiness remains as there is no final decision yet. Parliament is expected to adopt the relevant regulations, after which it will be decided whether there will be a protest on January 15, Velev added.

Malinov said that provisions about compensations for December 2024 have already been drafted, as well as a draft extension of the programme in the first quarter of 2025.

In the event of a shortfall, the state budget is to cover the shortfall in the Power System Security Fund. The deficit in the fund is about BGN 105 million, Malinov specified.

In order to ensure stability in the fund, which will allow adequate compensation of businesses if needeed, the Ministry of Energy will review the ceiling on producers' revenues above which they owe contributions to the fund, the interim energy minister said.