Online Newsletter
Sign up for our newsletter to receive the latest news and information from publics.bg

News

From Bulgaria

20.03.2013 14:41

EVN Requested that the Regulator Re-Thinks Electricity Prices

The company said it had told Bulgaria on Tuesday it would launch proceedings in an international arbitration court to safeguard its investments if no deal could be reached in the next three to six months

AUTHOR: publics.bg

© EVN Bulgaria

Austrian energy group EVN said it will take legal action against Bulgaria if it is unable to negotiate concessions over an electricity dispute it says has cost it EUR 48 million. The company also requested that the state energy regulator re-thinks the way energy prices are calculated, so that no additional cost is transferred to the customers. EVN instead offered that the portion of the price that goes for renewable energy is decreased and compensated by the creation of a special fund which will harbor incomes from the ETS.

EVN, which supplies and distributes electricity, is obliged to buy solar energy in Bulgaria at prices above market rates. The country's electricity regulator has also cut household prices following mass protests against costly energy and low living standards.

"These actions reduce the proceeds from the sale of electric energy," said EVN, which makes a third of its revenues from southeastern Europe, the bulk in Bulgaria.

EVN cut its full-year profit outlook last month, partly on the basis of higher costs in Bulgaria.

It said purchases of solar energy had cost it BGN 100 million (EUR 48 million) since last July and would reach some EUR 100 million over the next three months.

Solar parks are booming in Bulgaria thanks to incentives from the government, which has a target to have 16 percent of its energy coming from renewable sources by 2020.

But high electricity bills, partly due to a surge in expensive green energy, have prompted nationwide protests in the European Union's poorest country, resulting in the resignation of the center-right government of party GERB.

In response, the Bulgarian energy regulator has cut electricity costs for households by an average of 7 percent, mainly at the expense of power distributors EVN, Czech CEZ and Energo-Pro.

EVN said a cooling-off period of three to six months would now start, during which time it would consult and try to negotiate a settlement over its increased costs.