Bulgaria's State Electricity Co 'Sells Energy Below Market Prices'

Energy | January 25, 2015, Sunday // 12:31|  views

Georgi Kadiev. Photo by BGNES

State-owned National Electricity Company (NEK) is suffering losses worth millions of BGN due to "lobbyist" legislation amendments and a practice to sell electricity below market prices, a Bulgarian MP has claimed.

In December 2014, NEK sold some 650 MW of energy, nearly 50% of Bulgaria's total annual export, at BGN 70-71 per MW, which is ten percent below market princes, socialist lawmaker Georgi Kadiev has told private national channel bTV.

Kadiev's estimates suggest NEK is running a BGN 30 M loss just from these activities.

On Sunday Kadiev also explained he had submitted an inquiry to Energy Minister Temenuzhka Petkova.

He also reminded that amendments to the Energy Act were forthcoming which include changes a "liabilities to society" tax of BGN 15/MW/h. The latter levy replaced in August the "green energy" tax introduced by the previous elected socialist-liberal government that was revoked by the Constitutional court in end-July.

Kadiev alleged that the "lobbyist" amendment envisaged a cap on the new tax which would benefit bigger industrial consumers of energy, with the move depriving NEK of nearly BGN 40 M in revenues.

"The loss... will be dispersed among households and will increase consumer [electricity] bills by BGN 1 a month," he argued.

Electricity bills are set to go up in the next years, as energy watchdog officials maintain.

But the regulator, which under a new bill is set to become an "independent" (and not government-appointed) institution, is cautious since a drastic increase in bills in 2013 toppled down Bulgarian PM Boyko Borisov's previous government following mass protest.

At the same time NEK is actively exploring measures to tackle its massive debt worth about BGN 3 B (in an economy of about BGN 80 M), according to government estimates.

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Tags: NEK, Temenuzhka Petkova, Georgi Kadiev, lobbyist, market prices


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