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03.07.2014 12:06
Bulgarian Incumbent Gets Bigger Share of Power Price
Meanwhile the revenue from the energy price for the electricity distribution companies has shrunk with over 30 percent and that of end suppliers – with a quarter, to BGN 23.71/MWh and BGN 2.28/MWh, respectively.

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Closing the huge financial gap at the incumbent power company – Bulgaria’s National Electricity Company (NEC, frequently abbreviated as NEK), is the main challenge the energy watchdog had to tackle with electricity pricing for the year ahead, starting July 1, Elenko Bozhkov, member of the State Energy and Water Regulatory Commission (SEWRC) explained in the morning talk show of bTV.


A justified price hike

Nevertheless Mr. Bozhkov described the price hike as justified and discarded calculations published by a number of Bulgarian media about up to 30 percent increase for the business.

“The prices approved by the regulator are realistic and we cannot talk about a considerable increase. The price increase for households and businesses supplied by distribution companies CEZ, EVN and Energo-Pro is within the three percent threshold”, Bozhkov explained.

Asked to explain how the regulator found reserves for three consecutive decreases of electricity prices in 2013, Bozhkov stated that the “actual size of the financial gap in NEC was not known at the time”.

Shrinking share of private market participants' incomes

The regulatory authority has already announced the gradual inclusion of BGN 1.5 billion (about EUR 750 million) in regulated electricity pricing. Looking at the distribution of price consumers on the regulated market pay per megawatthour, BGN 114.10 are for NEC (and thus payments to electricity producers), up from BGN 100.43/MWh. The share of the Electricity System Operator (ESO) also saw a growth of some 15 percent to BGN 7.98/MWh. Meanwhile the revenue from the energy price for the privately owned electricity distribution companies has shrunk with over 30 percent and that of end suppliers – with a quarter, to BGN 23.71/MWh and BGN 2.28/MWh, respectively.

NEC was also allowed to pay less to two TPPs which have long-term PPAs with electricity sold exclusively on the regulated market. What is more the watchdog said it would cut significantly feed-in tariffs, another major expense for NEC.

The pricing decision was met with discontent from electricity distribution companies and renewable energy and conventional producers alike, as well as industrial consumers which, it surfaced would take a heavier pricing hit for the benefit of the regulated prices for households.

TAGS: Bulgaria | energy | electricity | regulation | power prices | National Electricity Company | CEZ | EVN | Energo-Pro 

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