site.bta Shift of Authority for Setting Regulated Household Electricity Prices from Regulator to Cabinet a Technical Matter, Says Energy Minister

The parliamentary Energy Committee Tuesday adopted on first reading two bills amending the Energy Act that postpone the liberalization of the electricity market for household customers. The sitting was attended by Energy Minister Zhecho Stankov.

The MPs voted to delay the liberalization of the retail electricity market. Between the two readings of the texts, the duration of the delay will be determined, and mechanisms for electricity supply and procedures for compensating the price differences between regulated and market prices will be specified. The Energy Ministry  aims for the changes to become effective July 1 - at the beginning of the regulatory period. The changes include a shift in the body responsible for setting the regulated price. The Energy Ministry is planning that this should be done by a decision of the Cabinet, rather than of the Energy and Water Regulatory Commission as has been the case so far.

BTA talked with Energy Minister Zhecho Stankov about the planned changes and the motives for them.

Following is the full text of the interview:

Q: What is the reasoning behind the change in how the regulated electricity price for households is determined?

A: We are talking about a mechanism by which a regulated price will be set. My duty as the Minister of Energy, and that of the Cabinet, is to protect household customers from exposure to electricity prices as they are on the free market. We have achieved our goal - there will be no liberalization of the retail market. As for the mechanism by which the regulated price will be determined, whether it will be the Energy and Water Regulatory Commission (EWRC), which has made decisions until now, or whether the regulator will provide the calculations to the Cabinet so that it will make the decision, this is purely a technical procedure. We have managed to halt the liberalization process indefinitely in a way that ensures the energy of the end suppliers and ensures that the price remains regulated, so that every July, household customers will know the price of electricity for the upcoming year.

Q: Will the regulatory period remain the same?

A: The regulatory period will be from July 1 to June 30 of the next year.

Q: EWRC makes decisions on the regulated price as an independent body. Under what assumptions, and based on what opinions, can the Cabinet determine a price different from that proposed by EWRC?

I have great trust in EWRC's expertise. I worked very well with its chairman Ivan Ivanov for many years. Now, I am extremely pleased with my collaboration with [the new chairman] Plamen Mladenovski. We have full confidence in the Commission's expertise, and in the accuracy of its calculations. Of course, the Energy Ministry and the Cabinet reserve the right to review each of their calculations and engage in constructive dialogue with EWRC. But again, I believe these are technical matters, and I do not expect them to have an impact.

Q: Will public consultations at EWRC still be held?

Public consultations will be mandatory. The most important thing for us is that things should be done in a transparent manner. Public consultations held by EWRC, with the participation of the Energy Ministry and energy companies, among others, are an essential part of this process.

Q: Will household customers need to re-sign contracts or add annexes with their electricity suppliers after the planned amendments to the Energy Act?

My task as Minister of Energy has always been to minimize the administrative burden. No one will need to visit any office of any company. The only obligated parties until July 1 are my colleagues in Parliament, whom I have urged to adopt the proposed amendments to the Energy Act as quickly as possible on first and second reading. Between the two readings, we will introduce an additional amendment to further hone the processes so they are flawless from a financial, EU and pricing policy perspective.