2024-04-18 18:00:21
Deputies of the energy committee freeze the liberalization of wholesale electricity for one year. According to the current law, it should have been from July 1 of this year, but three draft laws – of the BSP, joint GERB-SDS and DPS, and ITN, provide for its postponement by one year. It was voted by a majority of 15 votes and will enter the plenary hall on Friday.
The first draft law was submitted by the BSP MPs with the first signature of Cornelia Ninova, on March 21. On Wednesday, April 17, those of GERB-SDS and DPS and of ITN were also tabled in the parliament. All three are analogous and on second reading are likely to be merged.
This means that on July 1, KEVR will again have to rule on the price of household electricity at regulated prices. The chairman of the energy regulator supported the delay, but said the decision should have been made in February as companies needed time to prepare price proposals. He predicts that it will probably be necessary for KEVR to decide how much electricity should cost for households not from July 1, but from August 1. There was such a precedent in 2015.
According to the current changes in the energy law, which are from October last year, from July 1, NEK had to cease to be a public supplier, that is, it would not make a mix of electricity for households, and KEVR would not set quotas for the plants for the regulated market . Electricity prices in the transition period – until 2026 – would be determined by the government. The final suppliers, the companies of “Electrohold”, EVN and “Energo-Pro”, had to buy the electricity from the exchange, and the difference between the price of electricity determined by the cabinet and that of the exchange was to be covered by the “Security of the Electricity System” fund.
The requirement for a 100% free wholesale electricity market is among the conditions for the second payment in the recovery and resilience plan. It was not clear during the debate whether it would not take place. But the chairman of the commission, Delyan Dobrev, said that when the liberalization was adopted in October, it was expected that the money would come in November, but so far it has not arrived.
The MPs from BSP, GERB, DPS and ITN defended their projects. The main debates were between Dragomir Stoynev, Delyan Dobrev, Ramadan Atalay on the one hand and Radoslav Rybarski from “We continue the change”.
Dragomir Stoynev from the BSP said that he was pleasantly surprised that other political forces had similar proposals. If months ago only the opposition had concerns that the reform to move to a free wholesale market was not prepared and that chaos would ensue, now other political forces also recognize it. The adoption of wholesale liberalization was only adopted to service the recovery plan and the second payment under it.
Stoynev believes that the current cabinet does not have the capacity to deal with this reform, there are many question marks and the end suppliers are also coming, who are wondering where they will find free financial resources and increase the compensations for months. The “Security of the Electricity System” fund had to check almost all the accounts of consumers, which are 4.7 million.
Dobrev clarified that they are not changing the deadline for households to enter the free market, it remains the end of 2025. According to him, this one year, the delay of the first step that is given is to replenish the “Security of the electricity system with BGN 1 billion and to create certainty that this model will work. And in the reasons for the bill of GERB-SDS and DPS it is written that from the energy industry in the form of dividends to the state and other methods, more than 5.4 billion BGN, which led to a deficit.
Pavela Mitova from ITN stated that the main reasons for her party to ask for the postponement were the social consequences that this liberalization would have. She focused on the closing of the leaks and the financial condition of the fund, which, according to her, is currently tragic due to the incompetent management of the financial policy.
Radoslav Rybarski from “Continuing the change” stated that the deputies from the four parties have copied well from each other. He called their bills another delay and said he doesn’t see anything changing in this one year. The compensatory mechanism was made very quickly, in a few weeks, and there was no instillation of fear. He commented that the market with low electricity prices is now extremely favorable for liberalization, “but we are starting with pre-election fears”, he said. He emphasizes that for the second step, the exit of households to the free market from the beginning of 2026, only 6 months will remain for preparation.
It is troubling to me that for a reform passed under the PVA, we are now backsliding, a precedent that the EC will take into account and the volume will have an impact on payments under the plan. The road map for climate neutrality and 2-3 more reforms to bring us closer to payment remain. I do not believe that the EC will accept this move as unreported, the MP from PP also stated.
Delyan Dobrev objected to him that even now everyone can go to the market and be paid on Saturdays and Sundays to consume electricity, but at the moment there is no compensation mechanism for household consumers on the free market.
He criticized KEVR for not issuing additional licenses to electricity traders who want to be final suppliers. The chairman of the regulator Ivanov replied that there were no such requests.
Stoinev from BSP replicated Rybarski and asked him by what formula the government will determine the average annual price of electricity, there is no such mechanism. Can someone tell me what the invoice will look like, what is covered by the state, what is actually consumed, he commented. And he said that the EC directive did not include a year for the liberalization of electricity, “you set it without being prepared. Take some money under the recovery plan, and let people get better.
Rybarski said the arguments have so far been untenable.
DPS’s Ramadan Atalai said he wants to stop this competition of who cares more about residential consumers. He said that for 10 years they fought for the government not to set any price, and now the law has brought it back. He also criticizes that one price is set for everyone and for those who heat their pools. He also commented that the regulatory documents have not been prepared, nor has it been said how the final suppliers will find money to buy the electricity from the exchange and then pay compensations.
Representatives of the final suppliers stated that for the winter month this is BGN 1 billion for the three companies.