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07.12.2017 12:01
ESO gave Future Energy’s clients an exceptional deadline extension for choosing a new supplier
The Energy Management Institute supports the changes in the Energy Act which would oblige plants above 5 MW to trade on the exchange

The Electricity System Operator (ESO) gave Future Energy’s clients a deadline extension for choosing a new supplier as the electricity supplier has been suspended from the market since 2 December. According to different information sources, its clients are between 3 500 and 5 000, including shopping malls, fast food chains, schools, hospitals and others.

A message on ESO’s website says: “In relation to the emergency situation regarding Future Energy OOD suspension from the market and many clients’ switch to a last resort supplier, the deadline within which the distribution system operators will accept applications for supplier switching for those clients, is extended until 15 December.”
According to the Rules for Trading with Electric Power, the deadline for that is until the 10th of the previous month.
The Chairman of the Energy and Water Regulatory Commission (EWRC) Assoc. Prof. Ivan Ivanov commented for that on the open meeting of the regulator today, when the changes in the Rules for Trading with Electric Power announced in November should be adopted, it will be discussed whether a provision protecting consumers’ rights in such cases can be included in the rules.
We would like to remind that on 1 December the electricity supplier submitted a request to ESO to be suspended from the market and as of 2 December this is a fact. The company asked ESO to immediately be removed from the electricity market due to inability to supply quantities for its clients, termination of contracts with key suppliers and accumulation of huge imbalances in its balancing group.
The supplier being removed from the market, all its clients automatically go to last resort suppliers, CEZ, EVN and ENERGO-PRO respectively, depending on the licensing territory they are in. One of the purposes of creating last resort suppliers was exactly for such cases where, for one reason or another, the suppliers stops supplying electric energy to its clients, so that they are not left without power supply. The other main aim of last resort suppliers is to incentivize, through higher prices for the electricity they sell, consumers who are obliged to enter the free market to do so as soon as possible.
The bad news is that last resort suppliers’ prices are significantly higher than those on the regulated market. Currently, the regulated market price of energy (without charges for network, renewables and imbalances) is 73.92 BGN per MWh, VAT not included. At the same time, last resort suppliers’ price of CEZ Elektro is 124.34 BGN per MWh, ENERGO-PRO – 121.61 BGN, EVN – 149.73 BGN and National Electricity Company (NEC) – 141.56 BGN.
The Energy Management Institute (EMI) explained that in such cases clients have three options. The first one is, of course, to stay with a last resort supplier, but it would definitely be more costly. The second is to choose a new supplier if they manage to do so in the respective deadline (until 15 December in the case of Future Energy), the contract will enter into force from January 2018. Third option available to customers is to go back to the regulated market. This would be possible only for clients with the so-called standardised load profile (households and firms on low voltage), but not for companies on medium voltage. EMI also warned that if payment obligations to the last resort supplier are accumulated, supplier switching could not happen until they are paid.
According to EMI, the current situation shows that changes in the Rules for Trading with Electric Power beyond those EWRC is about to adopt are necessary. Ivanka Dilovska and Slavcho Neikov said that one of the changes which should be considered is introducing the ability of other electricity traders to require a particular trader’s suspension from ESO. Moreover, the institute believes that procedures, which ESO should follow when suppliers withdraw or are removed from the market, should be set out in detail as well the system operator’s role in this process.
EMI does not exclude the possibility that other suppliers would want do withdraw from the market or be removed by ESO. The fact that an electricity trader has left the market does not mean it cannot go back. This could happen by submitting an application to ESO up until 3 months after the withdrawal, EMI explained.
A check by showed that up until now 11 suppliers have left the market this year. In the group of the withdrawn ones are GUNVOR INTERNATIONAL B.V. (12.01.2017), Tinmar Supply EOOD (15.05.2017), SEE Power Trading AD (07.07.2017), LONIKO EOOD (14.09.2017), SASA GROUP BULGARIA OOD (18.09.2017), Watt and Volt EMT AD (01.10.2017), EDISON TRADING S.P.A. – BULGARIA BRANCH (01.12.2017). Except Future Energy, Dans Energy OOD (07.07.2017), RC Power Energy OOD (26.08.2017) and Toshel-92 EOOD (25.10.2017) were suspended from the market.
EMI pointed out that the current issue of the free electricity market is that on the Independent Bulgarian Energy Exchange (IBEX) a small portion of the whole volume is traded. For 2016, NPP Kozloduy, TPP Maritsa East 2 and NEC, who form 85% of the supply, traded 16.7 TWh in bilateral contracts on their own platforms and 2.182 TWh – on the day-ahead market (DAM). Therefore, there is a shortage of electric energy, especially peak energy on the exchange, where there is transparency on the auctions and participants.
This is the reason EMI announced its firm support for the amendment of the Energy Act which would oblige all producers above 5 MW to sell all their energy on the exchange. There is no point for households to enter the free market, until there is no liberalisation of the production, experts from the institute believe.
The current situation has confirmed the justification of the government’s slow but certain approach towards market liberalisation, Dilovska and Neikov commented further. According to them, there already is a necessity for the preparation of a comprehensive roadmap for the liberalisation of the electricity market.

TAGS: Electricity System Operator | ESO | Future Energy | new supplier | choice | Energy and Water Regulatory Commission | EWRC | Rules for Trading with Electric Power | trade | electricity 

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