Bulgaria Faces Fine of BGN 9000 a Day over Delayed Implementation of EU's 3rd Energy Package

Energy | June 30, 2013, Sunday // 15:52|  views

Bulgaria's Economy and Energy Minister Dragomir Stoynev, photo by BGNES

Bulgaria's National Electric Company (NEK) may face penalty payments of BGN 9000 a day for months on end, according to Economy and Energy Minister Dragomir Stoynev.

Stoynev, as cited by Darik radio, announced at an extraordinary press conference on Sunday that Bulgaria could be penalized by the European Commission over its failure to separate the electricity transmission network from the Electricity System Operator (ESO) by June 30.

Stoynev explained that the delay of the spin-off of ESO from NEK had been caused by the caretaker government.

He made clear that the caretaker government had deliberately blocked the spin-off procedure by restructuring the Board of Directors of ESO and amending its articles of associations 2 days before Stoynev assumed the office of Energy Minister.

Bulgaria's Energy Minister informed that ESO would move to finalize the change of ownership and the transfer of its shares to the new owner, the Bulgarian Energy Holding (BEH), in the coming week, adding that Bulgaria faced a penalty of BGN 9000 a day by the EC until the completion of the transaction.

Stoynev went on to say that NEK was in a critical condition due to its debts of BGN 1.9 B.

He specified that NEK owed the Bulgarian Energy Holding a total of BGN 755 M, its debt to the Kozloduy nuclear power plant amounted to BGN 320 M, and its debt to heating utilities stood at BGN 60 M.

Stoynev told journalists that the Kozloduy NPP had signed contracts envisaging price tags of around BGN 55/MWh, instead of the actual price of BGN 67/MWh, thereby boosting the profits of companies exporting cheap electricity at the expense of Bulgarian citizens.

"One and the same product made by one and the same company was sold at a price difference of by BGN 12/MWh, which benefitted certain companies and related persons. The N-plant is to sell electricity at the same price on the domestic and foreign markets, following market principles. Otherwise the Kozloduy NPP artificially reduces the price of electricity sold on the Bulgarian market," he stated.

Stoynev also drew attention to the fact that Valentin Nikolov, in his capacity as Chair of the Board of Directors of BEH, had signed a contract with Mihail Andonov, then-CEO of BEH, enabling him to dispose of 10% of BEH's long-term assets without seeking permission from the company's Board of Directors.

Stoynev argued that the step had given Andonov unprecedented powers, such as to sell all dams and hydropower cascades of NEK, and should have been opposed by caretaker Economy and Energy Minister Asen Vasilev.

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Tags: Dragomir Stoynev, Third Energy Package, National Electric Company, NEK, Electricity System Operator, ESO, Bulgarian Energy Holding, caretaker govenment, asen vasilev, Kozloduy NPP


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